Dening

a wining and successful IPTV strategy in the Middle East

Case Study mmC Group Strategy Consultants
May 2011 For further informa@on please contact: Carlos Valdecantos (+34 696 940 2210; cva@group-mmc.com)

mmC GROUP Strategy Consultants IPTV Strategy in ME_may2011

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Agenda
Strategic reecDons on IPTV Is there a business case for IPTV in the Middle East? IPTV players across the value chain and key technical challenges

mmC GROUP Strategy Consultants IPTV Strategy in ME_may2011

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IPTV has been one of the telecommunica4on hypes with higher trough of revenue expecta4ons and business s4mula4on...
INTRODUCTION > CORE BELIEVES ON ANY IPTV STRATEGY

Hype cycle telecommunicaDon 2009-2010

ExpectaDons

NFC Payment Addressable TV Adver@sing Technologies Mobile Social Networks 4G Standard VoIP Wireless WAN

Cloud Compu@ng Mobile Applica@on Stores Network Sharing Femtocells Near-eld Communica@on Unied Communica@on Next-Genera@on Service Delivery Pladorm Service-Oriented Architecture in OSS/BSS Mobile Adver@sing

Revenue innova@ons

Gartners assumpDons Revenues of next years will be generated from exis@ng products However, in the core business there are very limited revenue innova@ons and therefore, growth outside core business is also required Technical innova@ons drive bandwidth and can help to op@mize the cost base

Rich Communica@on Suite

cdma2000 1xEV-DO Rev. B Bluetooth Low-Energy Wireless Technology Smart Antennas LTE-A Video Analy@cs Context Delivery Architecture

Long Term Evolu@on New Genera@on Opera@ons Systems and Sofware Advanced Telecommunica@ons Compu@ng Architecture WiMAX 802.16e-2005 IMS Interac@ve TV Mobile Instant Messaging Mobile Presence

Mobile Gaming Loca@on-Based Services MPLS

IPTV Mobile IPTV Broadcas@ng

Loca@on-Aware Technology Integra@on as a Service Electronic Bill Presentment and Payment for Telecom Providers Mobile E-mail Services FTTH Switched Digital Video Mobile Search

Mobile TV S Loca@on-Aware treaming Infrastructure Applica@ons

Technology Trigger

Peak of Inated Expec- ta@ons

Trough of Disillusionment

Slope of Enlightenment

Plateau of Pro- duc@vity

Time

Source: Gartner

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over the last five years, a timeframe that provides enough data points for analysis. Of the operators we examine (see Figure 2.5), only Belgacom and KPN have built household penetration above 10% within three or four nnovator p this was due in large part to ...however, IPTV is s4ll a revenue iyears. For KPN,romise as very few countries reach the its DTT pay-TV service, Digitenne. All others have household penetration of less than minimum level of penetra4on to defend the case. 10%, and less than 5% in several instances. So far, there is little sign of an inflection INTRODUCTION > SLOW ADOPTION OF IPTV OFFERINGS IN EU & US point in the penetration trend lines. No European or North American incumbent is showing any signs yet of reaching the 31% penetration level that PCCW has in Hong Kong for its IPTV offering, Now TV.

IPTV AdopDon per % of household penetraDon

Comments

Figure 2.5 Percentage of households subscribing to telecom IPTV services since launch
% of % of households households 15% BT FT Verizon 10% KPN (inc. DTT) Belgacom DT Telecom Italia AT&T Telia

Many incumbent operators have launched IPTV or VOD services over the last ve years, a @meframe that provides enough data points for analysis In the European market, only Belgacom and KPN have built household penetra@on above 10% within three or four years. All others have household penetra@on of less than 10%-5% in several instances. No European or North American incumbent is showing any signs yet of reaching the 31% penetraDon level that PCCW has in Hong Kong 22 20 for its IPTV oering (Now TV). 21

5%

So far, there is lible sign of an inecDon point in the penetraDon trend lines

0% 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Quarters since service launch

Source: Informa, Oliver Wyman analysis. Note: Last data point on all series is 2Q09.

Quarters since service launch

Source: Informa; Note: Last data point on all series is H22009

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There are few out-performers in the telecom space where IPTVs take-up reected a substan4al contributor to growth.
INTRODUCTION > IPTV TAKE-UP > EUROPEAN BENCHMARK

BACK-UP SLIDE
Comments

IPTV take up as a % of broadband base

Portugal Telecom is outperforming peers despite a late launch Belgacom reached 50% penetra@on of its broadband base and has been a consistent pioneer in IPTV broadband TeliaSonera and France telecom have reached signicant scale Swisscom is experiencing a good momentum from a slow start So far Telefonica, Telecom Italia, DT, BT and KPN have seen limited success (for KPN we use IPTV only ie exclude Digitenne)

Source: Company data, Morgan Stanley Research

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Dierent trends are responsible for the slow adop4on, but special remark should be done on OTT services as it means a mayor shiN in the TV business.
INTRODUCTION > IPTV TRENDS

Trend 1 Slow uptake of IPTV and reduced ARPUs

RaDonale / descripDon
Most of TV markets are already mature, ofen with well-established DTT, DTH, and cable TV oerings Its a challenge for telecom operators to break into these markets and win market share Gaining market share is no guarantee of high ARPU. With some excep@ons, IPTV ARPUs are generally lower than the average pay-TV ARPUs One reason IPTV ARPU is low is because few operators oer as much premium content as compe@ng pay-TV players Operators looking to improve ARPU may face a vicious circlethey lack the scale to jus@fy the high cost of premium content, but without it they lack the compelling content proposi@on needed to build scale In addi@on, in most of the emerging markets, local content is signicantly more important than interna@onal content The cuqng the cord eect unveils as the most fundamental change that threatens operators eorts to generate value from IPTV & VOD services A growing propor@on of video consump@on is moving to over-the- top services that are delivered across the open internet rather than over operators dedicated IPTV or VOD pladorms

Impact on business

2 Premium content is a vicious cycle

3 Increasing Cufng the cord eect

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Operators have the tools to prepare themselves against the IPTV and VoD threats, but what about a new player entering in the IPTV arena?
INTRODUCTION > OPERATORS CHALLENGES AND TENTATIVE COUNTERMEASURES

Major challenges for telecom operators

DescripDon and comments

Possible Countermeasures

A Increasing

network costs

As consumers gravitate to online video, operators bear increasing network costs without a commensurate increase in revenue, due to the prevalence of at-rate broadband packages In some markets, operators use trac shaping and bandwidth throwling at peak @mes to help protect customer experience and perhaps encourage heavy users to move to higher-priced unlimited services.

Pricing rebalancing charge more to nal user

B Redundant

investment in the TV space

If demand for 'over-the-top' services con@nues to accelerate, it threatens to render redundant at least some of the investment that operators have made in IPTV pladorms. Open delivery further fragments the environment in which operators must ght for pay-TV market share

Charge content providers & aggregators

Double bet and parDcipate in OTT video directly

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We therefore see four main ques4ons that should be addressed by telecom operator wishing to launch TV opera4ons.
INTRODUCTION > CORE BELIEVES ON ANY IPTV STRATEGY

1. 2. 3. 4.

Is there a business case for IPTV in the Middle East? Which should be the value proposi@on towards the market? Which technical solu@on ts best with each strategy? How should a telecom operator approach to IPTV implementa@on?

MAKE OR BREAK

TACTICAL OPERATIONAL OPERATIONAL

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Agenda
Strategic reec@ons on IPTV Is there a business case for IPTV in the Middle East? IPTV players across the value chain and key technical challenges

mmC GROUP Strategy Consultants IPTV Strategy in ME_may2011

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IPTV and VoD revenues es4ma4ons in Middle-East and North Africa appear to be appealing, with over 500m in 2014.
IS THERE A BIZ CASE FOR IPTV?

SAC/SRC (Euros)

MENA Broadband VAS Revenues forecast

MENA Broadband penetraDon of households in 2010

VAS revenues (USD m)

1,400.0 1,200.0 1,000.0 800.0 600.0 400.0 200.0 0.0 12.0 60.0 2010 19.0 118.0 Music VoD Gaming IPTV Online Advertising 49.0 70.0

%
0.900 0.800 0.700 0.600 467.0 325.0 0.500 0.400 0.300 213.0 0.200 0.100 Bahrain Jordan UAE EU 15 Qatar Oman 0.000 2011 2012 2013 2014

84% 75% 68%

48%

32.0

22% 13%

Source: Telco TV forecasts 2009-14, Ovum

Source: ITU; World economic forum 2010

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However, there are some doubts around the IPTV case (that apply to most of the ME markets) that should be considered when dening the IPTV case...
IS THERE A BIZ CASE FOR IPTV? > LESSONS LEARNT FROM OTHER IPTV CASES

Satellite TV 1 compeDDon reduces the target market

IPTV ARPUs 2 may be lower than pay-TV ARPUs

Fiber 3 investments move ROI further away the 3rd year

Signicant investment is required to deliver reliable IPTV services A reliable connec@vity around the home (DSL /FTTH) is s@ll a major issue (over 4MBs) Delivering HD content across telcos networks and the ability to scale up for carrying HD VoD is another issue

Premium 4 content is key, but damn expensive

OTT players 5 are also fragmenDng the market

Most of the ME countries hold mature TV markets, with well- established DTH and cable TV oerings. It is a challenge to break current status- quo and win market share Illegal satellite connec@ons account for at least 20% of the total Lack of interoperability for other devices that could poten@ally deliver IPTV reduces case poten@al
Note: OTT (Over the Top)

Gaining market share is no guarantee of high ARPU With some excep@ons, IPTV ARPUs are generally lower than the average pay-TV ARPUs Triple-play bundling strategies required to obtain revenue increase benet per RGU

Few operators oer as much premium content as compe@ng pay- TV players Operators looking to improve ARPU may face a vicious circlethey lack the scale to jus@fy the high cost of premium content, but without it they lack the compelling content proposi@on needed to build scale

A growing propor@on of video consump@on is moving to over- the- top services that are delivered across the open internet rather than over operators dedicated IPTV or VOD (video-on- demand) pladorms If this trend con@nues growing, the revenues share for telcos will be reduced

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as most of them have a direct impact on margins and break-even points of protability.
IS THERE A BIZ CASE FOR IPTV? > MARGIN ANALYSIS

ILLUSTRATIVE REAL CASE

IPTVs monthly margin analysis Considering the SAC split Modem cost: 30 $ STB cost: 200 $ Installa@on: 460 $ the gross margin (30$) over install cost (690$) gets a breakeven point at 23 MONTHS On top: Assume STB update on a 5 year interval at most Assume at least a 12% churn Assume compe@@ve response aec@ng top-line revenue

RISKS USD
80 70
TRIPLE PLAY CASE

6 14 50 75 25

60 50 40 30 20 10 0 25

30

2P Bundle

IPTV pack

= Subtotal

Backbone access

DSL access

Content

Gross Margin

Source: mmC Analysis based on real case in Europe;

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Telecom operators should assess the three dierent IPTV models to reduce investment protability risks whilst providing an appealing TV experience to the nal customer.
IS THERE A BIZ CASE FOR IPTV? > IPTV OPTIONS

PURE IPTV
Combina@on of both Linear Broadcast and Video on Demand Approach

HYBRID DTH / IPTV

Hybrid model combines broadcas@ng of linear TV through DTT / DVB-S and Video on Demand services through DSL Bandwidth requirements for DSL, (aka network costs) can be reduced since linear TV wont require broadband bandwidth capacity Revenue model as a combina@on of Subscrip@on based and Pay- per-view

Internet TV (OTT)
A pure Video On Demand Approach: Primarily portal based as extensions to broadcasters linear digital channels Connec@vity via Internet only Leveraging exis@ng content from digital channels funded through a combina@on of revenue sources including Adver@sing, Pay-per- view, Subscrip@on based and Download to own User generated and syndicated content from OTTs players portals and service delivery pladorms

Model DescripDon

Connec@vity via Operators Closed Broadband Network Standard Pay-TV distribu@on model Revenue model is a combina@on of Subscrip@on based, Pay-per- view and Adver@sing Broadcasters, content providers, adver@sers or disintermediators have a revenue sharing arrangement with the Telco

Risks & Benets

Serious compe@tor to DTH technologies Cost ineec@ve break even point afer years

Improves the economics of IPTV (reducing cost) Strict minimum speed requirements

Most aordable op@on; Internet accessible Limited content catalogue and QoS

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Depending on the scenario selected, the investments required will be dierent. The current tendency is to dene 4ght cost control mechanisms to avoid CapEx burn...
IS THERE A BIZ CASE FOR IPTV? > THE IPTV CAPEX ISSUE

ILLUSTRATIVE
Sample Hybrid IPTV CAPEX case study 1)

USD (in Million)

400

10 years Accumulated CapEx Breakdown

300 200 100 0

332.59 130.18

82.8

53.45

65.98

0.18

Accumulated CAPEX

CPEs

Sales Channels

BroadcasDng Network

TV Plasorm

SGA

11.2

2.4

0.7

3.80

0.41 3.44

0.23

10.11

0.66

CapEx Annual average of 31 M USD

41.75 115.8
New HW Replenished HW Installa@on teams HH installa@on

0.18

79.00
Sales Channels Comm & Adv

49.37

13.46
Core pladorm Advanced features OSS/BSS integra@on TV Plat Opera@ons SGA

HW Installa@on services Monitoring tools Network monitoring

Source: (1) mmC Analysis based on real case in Africa; Notes: CPEs: Customer Premises Equipments;

AssumpUons: A) 3 Oers up to 40 channels; B) Countrywide penetraUon of overall PayTV in 10 years: 23%; C) Operators IPTV M.S in 10 years: 33%

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op4mizing OpEx spending (accep4ng that most of the opera4ng cost might come from the content side and this will be hard to op4mize)
IS THERE A BIZ CASE FOR IPTV? > THE IPTV CAPEX ISSUE

ILLUSTRATIVE
Sample Hybrid IPTV OPEX case study 1)

USD (in Million)

200

10 years Accumulated OpEx Breakdown

150 100 50 0

23.33 172.8 63.83 62.8

26.48

6.36

Accumulated OPEX

Content

TV Plasorm

Network

CPEs

SGA

0.47 2.57 32.55 11.93 6.91 7.54

Variable costs Fixed costs Core pladorm Advanced features OSS/BSS integra@on TV Plat Opera@ons

0.23 15.00

OpEx Annual average of 16,3 M USD

31.28

36.42 20.07
HW Broadcast net Maintenance Sites Network monitoring

11.21

6.36

STB Licensing STB Repair

SGA

Source: (1) mmC Analysis based on real case in Africa; Notes: CPEs: Customer Premises Equipments;

AssumpUons: A) 3 Oers up to 40 channels; B) Countrywide penetraUon of overall PayTV in 10 years: 23%; C) Operators IPTV M.S in 10 years: 33%

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..while dening a segmented and pricing-innova4ve approach to gain market share, increase ARPU levels an reduce abandonment.
IS THERE A BIZ CASE FOR IPTV? > IPTV SEGMENTATION & PRICING

ILLUSTRATIVE OUTPUTS

IPTV SegmentaDon outputs

IPTV Pricing outputs

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A special remark should be put on OTT strategy. Telcos have the opportunity to be reference players while extending the tradi4onal IPTV model towards innova4on.
IS THERE A BIZ CASE FOR IPTV? > OVER THE TOP

Over The Top model Linear Non-Linear Content

How can an OTT model can benet current operators IPTV strategy?
Can we leverage on our premium rights (esp. sport) to drive up triple play through OTT? Should we rely on UGC and play the adver@sing bawle? How we op@mize the ber investment required to support the IPTV service?, is there an alterna@ve op@on? Service aggrega- tor How do we benet of an OTT models to avoid being bypassed in delivering content that clogs up our broadband network? Can we partner with specialized providers to drive innova@ve video services? Is there an easy way to mone@ze them? Whats the video consump@on demand of my base that can be delivered trough OTT services?

Broadcaster

Broadcaster

MulD- channel plasorm

Own channel

Portal aggrega- tor Video search

Final Customer

Notes: UGC: User Generated Content

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In our opinion, theres a business case for IPTV in the Middle East. Operators should successfully aaend the dierent challenges that separate success from failure
IS THERE A BIZ CASE FOR IPTV? > IPTV CHALLENGES & KEY DRIVERS

BUSINESS MODEL
Managing IPTV as a new service and the absence of business experiences at scale Addressing the right size of the required investments (e.g.. Content and technology) Using the IPTV as an ARPU and CLTV (life @me value) enhancer

CONTENT & MEDIA MGT

Seqng up a dedicated team for content selec@on and program schedule management Developing exper@se in content nego@a@on, cross-selling, promo@onal oer mgt and dening the content refreshment policies Ensuring quality assurance and compliance process for content providers

SERVICE CONTROL
Suppor@ng new services such as network PVR, VOD Distribu@on scheme Limi@ng access to certain services in case of network and service infrastructure overload (e.g.. Video servers) QoS Management and service control architecture to handle load peaks and service mixes

E2E SERVICE ASSURANCE

Strong need for architectures real @me troubleshoo@ng and monitoring (end to end) Proac@ve status analysis, automated trouble management and recovery process if required Proac@ve management of new areas such as video quality management and condi@onal access management

CUSTOMER CARE & BILLING

Integra@ng the IP TV billing processes with the exis@ng billing processes Building awrac@ve commercial oer by bundling TV services with Voice and Data Design new billing processes and build interfaces with external payment GWs Customer self modify subscrip@on

PRODUCT TECHNOLOGY CHOICES

Use of o-the -self products to be integrated in Telcos infrastructure or dene architecture and standards and ask suppliers to adapt their solu@ons to this scenario Cost eec@ve STBs with high video quality, GUI and interac@ve services Ability to oer high scalable @tle search for on-demand movies and content

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and learning from others success experiences and lessons learnt.

IS THERE A BIZ CASE FOR IPTV? > SUCCESS FACTORS IN IPTV

InteracDvity
Rely on it as a major dieren@ator compared to tradi@onal broadcast TV where there is no back channel Accelerate convergence on three applica@on screens (PC, Mobile and TV) Opportunity for personalized Ad selec@on

The Right Content

5 1
Look for the right content rights to make a dieren@a@on Look for the right commercial trade-os between content and services Providing specialism and local content customized to targeted groups Releasing content in a compe@@ve @me windows

Success Factors in an IPTV Strategy

Tight operaDonal and cost control

Require @ght cost control as compe@@on for IP TV customers is erce between Telecom service providers, broadcasters and Media companies Extendable content environment
Notes: ICC: Instant Channel Change

PosiDve User Experience

3

High Quality of Service

Quality of Service in IP networks to deliver constant quality in transmission Trade o MPEG4 compression with video deni@on Video Call Admission control

Provide improved ICC for immediate viewing Facilitate an easy STB installa@on Provide easy payments for pay- per-view services Automa@c system requirement checks and sofware updates

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Agenda
Strategic reec@ons on IPTV Is there a business case for IPTV in the Middle East? IPTV players across the value chain and key technical challenges

mmC GROUP Strategy Consultants IPTV Strategy in ME_may2011

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With the aim of understanding who is who in the IPTV compe44ve landscape, we should rst separate all players & roles involved across the value chain
IPTV COMPETITIVE LANDSCAPE IN ME > KEY PLAYERS ACROSS THE VALUE CHAIN

Simplied IPTV Value Chain

Equipment and Technology Network & Service Provisioning Content management & delivery
Direct deliver Subcontracts

Video consumpDon
Subscribes Deliver

Players

Equipment & Hardware systems

Sovware systems and service plasorms

Network distribuDon & BroadcasDng

Revenue share

AggregaDon & OTT Players

Customer

Subscribes

Content Provider Content rights Content pordolio Digitaliza@on and content produc@on Catalogue management

Roles

Content recep@on Signal condi@oning Video Headend Decoder +Streamer VoD/nVoD Servers Switches DSLAM IP-STB xDSL Modem

IPTV middleware Digital rights management (DRM) wrapping Content Related sw (encoding and packaging) Billing Service monitoring and network probes CAS,IP-Scrambler QoS & Monitoring Managed services

Mul@cast / Unicast over DSL and Fiber technology networks Content sourcing Procures HW & SW Branding & packaging Installa@on Service provisioning Billing Customer Support

Content Aggrega@on Content distribu@on network Content sourcing Technology deployment Uses Telcos network for service provisioning Branding & packaging Installa@on

Buys Set top Box Buys IPTV package Pulls content and adver@sement

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Exis4ng mul4ple op4ons in the region, its key to iden4fy which of these players t best with the operators technical and business requirements.
IPTV COMPETITIVE LANDSCAPE IN ME > KEY BRANDS PER ROLE

NOT EXHAUSTIVE
Detailed players split per role

Players

IPTV STBs

IPTV access Encoders and CAS

IPTV Streamer & Middleware

VoD providers

IPTV Service plasorms

OTT

Content provider

Samples

Note: Within the last 5 years: Tandberg TV was bought by Ericsson; Tandberg STB and Barco were bought by Cisco; Myrio was bought by NSN; Securemedia, Broadbus were bought by Motorola STB: Set-top Box; CAS: CondiUonal Access Systems; VoD: Video-on-Demand

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While theres no one single top-notch congura4on, most of the ME telecom operators have opted for a big player combina4on as a way to get implementa4on secured.
IPTV COMPETITIVE LANDSCAPE IN ME > TOP PLAYERS & MENA IPTV OPERATORS

NOT EXHAUSTIVE
Lessons learnt
Most telcos are op@ng for hybrid IPTV/DTH technical solu@ons The advantages/ disadvantages of any of these op@ons really boils down to two signicant factors, the RFP and vendor selec@on process and the System Integrator (SI) alloca@on Big names deliver end- to-end solu@ons as turn-key contractors, engaging specialist-SIs and providing all managed services required

Top world vendors per category 1)

Set Top Box

Operators & IPTV Partners selecDon

Mozaic TV (Qatar)

Access
eLife TV (UAE) (2)

Middle ware
MT TV(Morocco)

VoD
Du TV+ (UAE)

Video Headend SDP and DRM

Source: (1) 2010 MRG, Inc. Note: (2) Launched in 2011

(Egyp@an Advanced Mul@media Systems) (2)

EAMS

(Bahrain) (2)

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There are 3 key technical implica4ons that directly aect the IPTV technical features and requirements required to deploy an outstanding video experience.
IPTV COMPETITIVE LANDSCAPE IN ME > IPTV TECH STRATEGY

Major technical requirement

A Video is bandwidth hungry

DescripDon and comments

A video le is huge in comparison with almost any other type of informa@on carried over a network and consumes a signicant bandwidth of it.

Technical implicaDon
Which Service Model?

Dependence

depending on the nature of the content, the format of the video, and the appliance(s) under which the video will be delivered

Streaming video requires RT network performance

Video is highly intolerant of varia@ons in delay and packet loss, and is corrupted by small varia@ons of them, destroying the viewing experience.

Which Delivery Model?

depending on the characteris@cs of the customer access network and the metro connec@on network

Video is a conDnuous always on experience

If any por@on of a video play goes badly, complaints and demands for refunds will result. Any failure in a video connec@on is almost certain to create nega@ve customer reac@on

Which Management and Support Model?

depending on the way in which video will be ordered, supported and billed

Note: RT = Real Time; BB = Broadband

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At a customer perspec4ve, the video-user-experience should be a set of dierent func4onal services towards personalized TV. Commercial requirements will determine the IPTV service footprint desired.
IPTV COMPETITIVE LANDSCAPE IN ME > IPTV SERVICE OFFERING

ILLUSTRATIVE

Desired Feature

Most valuable feature

Prime@me Any@me Catch-up / Start over prime@me Caller ID on TV Mul@-room DVR Channel Video Thumbnails Remote Monitoring using TV News & Informa@on Widgets Single-player games DVR Place-Shifing External Hard Drive for DVR

Willingness to pay for

Prime@me Any@me Caller ID on TV Catch-up / Start over prime@me Mul@-room DVR Channel Video Thumbnails Remote Monitoring using TV News & Informa@on Widgets DVR Place-Shifing Single-player games External Hard Drive for DVR

Churn rate

AVERAGE LEVEL (combining 4 factors)

Prime@me Any@me Catch-up / Start over prime@me Caller ID on TV Mul@-room DVR Channel Video Thumbnails DVR Place-Shifing External Hard Drive for DVR Single-player games News & Informa@on Widgets PC-to-STB interac@on

1 2 3 4 5 6 7 8 9 10

Prime@me Any@me Catch-up / Start over prime@me Caller ID on TV Mul@-room DVR External Hard Drive for DVR Single-player games DVR Place-Shifing Digital Media Place- Shifing Channel Video Thumbnails PC-to-STB Interac@on

Prime@me Any@me Catch-up / Start over prime@me Caller ID on TV Mul@-room DVR Remote Monitoring using TV Channel Video Thumbnails DVR Place-Shifing Digital Media Place- Shifing News & Informa@on Widgets Single-player games

Note: TV 2.0: The Consumer PerspecUve. Park Associates Research (Percentage of U.S. adult home broadband users raUng feature as 5-7, n=2,720, +2%)

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At a technical perspec4ve, IPTV has explicit requirements to ensure a successful video experience
IPTV COMPETITIVE LANDSCAPE IN ME > SERVICE MODEL REQUIREMENTS

NOT EXHAUSTIVE
Service plasorm-side requirements
Streaming and Buering support: addi@onal 1-2 Mbps SDTV addi@onal 3-5 Mbps HDTV) Caching support Video distribu@on to customer gateways Network Load Balancing VoD buering support Non-stop delivery support Storage support: HD 720p = 4 Gb per 1h le HD 1080p = 8 Gb per 1h le PVR support

IPTV service models

Network-side requirements (bit rate BW)

Minimum network guarantee MPEG-2: 3.5 Mbps SDTV; 16-19 Mbps HDTV MPEG-4: 1.5 -2 Mbps SDTV; 6-8 Mbps HDTV Minimum network guarantee MPEG-2: 3.5 Mbps SDTV; 16-19 Mbps HDTV MPEG-4: 1.5 -2 Mbps SDTV; 6-8 Mbps HDTV Network capacity management support Network conges@on avoidance E2E QoS management

Content-side requirements
SD TV (704x480) (4:3 & 16:9) SD TV (640x480) (4:3) HD TV (1280x720) (16:9) HD TV (1920x1080) (16:9) 3D TV (1280x1080) (16:9) MPEG format: 30 - 60 FPS SD Resolu@on: 480p HD resolu@on: 720p Full HD resolu@on: 1080p 3D resolu@on: 1080p H.264, AVC or VC-1 compression codecs SD Resolu@on: 480p HD resolu@on: 720p Full HD resolu@on: 1080p 3D resolu@on: 1080p H.264, AVC or VC-1 compression codecs

TV & Video Broadcast

VoD

Store for Play (Video download)

Note: Size and Bandwidth gures depend on dierent variables (including bit rate, compression codec, etc.). EsUmaUons for illustraUve purposes only.

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understanding that there are signicant dierences, as well as some common points between the various technology service delivery op4ons
IPTV COMPETITIVE LANDSCAPE IN ME > IPTV SERVICE DELIVERY MODELS

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and that transi4oning IPTV into a mass-market service will undoubtedly require a rened and robust solu4on. In other words, there may be no second chance.
IPTV COMPETITIVE LANDSCAPE IN ME > MANAGEMENT & SUPPORT MODEL

Management & Support Challenges

1 "Always On" User ExpectaDons, Flawless Quality

Requirements
Dieren@ated and determinis@c QoS End-to-end service and policy control Non-stop service delivery / opera@on Op@mized broadcast TV delivery (distributed mul@cast, IGMP snooping) Op@mized video content inser@on (exibility to insert video content at centralized and decentralized loca@ons) Accurate intelligence on resources Video quality measurement/monitoring BTV/mul@cast video admission control VOD/unicast video admission control

RaDonale

ILLUSTRATIVE

Video has stringent SLA needs Eec@ve SLA enforcement Uninterrupted viewing 24x7 Minimize BTV transport cost; maximize channel bouquet Minimize VOD transport cost; regional content, ad inser@on; scale higher VOD concurrency Detect and prevent conten@on Verify perceptual QoE for users Limit BTV channel overbooking Limit VOD session overbooking

Capacity 2 Planning, Cost Control, Right- Sizing

CongesDon 3 Avoidance, Service Assurance

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Its therefore mandatory to dene in detail what technical scenarios are required to succeed in the selec4on of the technology op4ons available with a long-term vision.
IPTV COMPETITIVE LANDSCAPE IN ME > SIMPLIFIED IPTV SYSTEM ARCHITECTURE

ILLUSTRATIVE
iii TECHNICAL SOLUTION DEFINITION
Vendor map screening Vendors evalua@on against requirements Vendors selec@on Economic impact
Derives in

i STRATEGY DEFINITION

ii REQUIRE- MENTS DEFINITION

Business requirements Commercial requirements Technical requirements Opera@on requirements

iv ARCHITEC- TURE DEFINITION

Logical architecture design Physical architecture design O&M processes deni@on

Strategic alterna@ves Strategic TV service models alterna@ves Technical scenarios deni@on Business case
Derives in

Derives in

STRATEGY DEFINED

REQUIREMENTS DEFINED

TECHNICAL SOLUTION DEFINED

IPTV)Applica1on)server) Subscriber)database)

ARCHITETURE DEFINED

Middleware)) En1tlement)System)) Head)End)control) Asset)management) Electronic)Prog)Guide) Session)Manager) Content)delivery)plaAorm)

VOD)Data

Set)top)box) EPG)Client) Condi1onal)Access) Client) Broadcast) Applica1on) QoE) Monitor) VoD)Applica1on)

LIVE)TV

VOD)Server) VoD)Resource) manager) Video)Pump)

Encoding)and) Compressing)
Linear) Content

CA)System)

VoD)Decryp1on) Encryp1on)) Resource)Manager)

Scrambler)

Video)Decoder)

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mmC Group Strategy Consultants

Joaquin Turina 2, 1st floor 28224 Pozuelo de Alarcn, Madrid Spain Phone: +34 91 129 8100 Fax: +34 91 714 1888 Web: www.group-mmc.com Blog: www.consultantvalueadded.com

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