Just the other day we completed an upgrade to last years IPTV Benchmark Study. This years edition was published in cooperation with Nokia Siemens networks and is focussing in particular on the gradually growing competition between open and managed IP platforms.

The following chapters were contributed by eyetag media engineers network:
- Web TV: Vertical disruption in times of Web 2.0
- Top-tier type of contents: Struggle over channel and platform control (including reference case “Anti-Tube”)
- Second-tier type of contents: Finding a viable business model
- Independent and prosumer content: Absorbing the trend and leveraging assets on the edge
plus snapshot chapters on Joost and Babelgum, Brightcove and Youtube.

Order your copy now. And buy one for your little sister, too..!

This is the title of my most recent study project, over which I just graduated to MBA in Media Management. Below I want to give a little impression of what the paper was about.

The paradigmatic changes of consumers’ value prop - all of which are regular subject to this blog and thus shall not be repeated here - affect a number of related industries and throw up a plethora of questions on the future distribution of filmed entertainment.

“We are searching for the new platform or the new channel that will drive the profits in the future, but there are so many unknowns . . . What we do know is that the entire model is up for grabs.”,

said Kevin Tsujihara, president of Warner Bros. Home Entertainment Group already in 2005, marking a change in executives’ mindsets that is almost common sense among industry leaders today.
The thesis focuses on processes, operations and questions of a strategic innovation management resulting from the tectonic shift filmed entertainment is undergoing these days. Extracts of data from all important segments are being collected, agnostic of platform or delivery method, since market segmentation in IP’s advent to TV needs to embrace a new scope of competition. Underlying core belief is that markets are substantially driven by customers’ sets of needs and attached value propositions and hence products can only be developed by careful exploration of those needs. Ratio of argumentation is that by building up excellence in meeting those needs, traces for exploiting customer base and benefit from such engagement can be found.

Core interest of the paper was to discover differentiation options by leveraging open network services and their multicast and participation capabilities in comparison to linear broadcast service offerings of the past. What drives users of mass market numbers now to the Internet and its myriads of communities and social networks?
What can managed network operators and content providers learn from this migration? How can they incorporate success factors into their own environments and drive market evolvement actively?

In order to reach to those findings, the opening chapter of the paper is concerned with a basic description of the platforms competition, their respective service propositions and fundamentals about the essence of value add.
Basic usage patterns and distinct user types in the fragmenting media landscape where examined in the next chapter. Seven key trends in digital individualization helped in the later course of the research at determining success factors and framing disruption to industry incumbents. Following up background information on changing motives and value capture within networked media was provided.

Chapter 3, Service Analysis, added more insights to the industry. It investigated more of the specific structure of each market and general industry independencies by analyzing value chains and business webs, generic payment models and exemplified offerings of digital TV (“Best of Breed”), IPTV (“The Pioneers”) and Broadband TV (“The Trials”). Basic assumptions for pre-requisites to success at on-demand content provision where drawn and lead to three key success factors. Content range, value add by functionality and achieving convenient media experiences. Broadband TV brings strong complementary capabilities to the area of broadcast, so in a summary to the service analysis chapter the evolutionary effects of broadband video to the industry where illustrated.
In Chapter 4 resource-based perspective was added to the examination. Variables for a successful differentiation where collected in here.
But what path towards achieving innovation advantage can be chosen? The essence of paradigmatic changes examined was subsumed in the last part and the findings are attached to three types of new aggregation services (Microplatforms, Aggregators and Reconstructors, following Umair’s classification).
Network effects occurring out of distributed economies of scale waited to be explored. Absorbing of users’ value propositions and inviting them to participatory engagement turns out to be a likely way to go. Analyzing incorporation potential requires to look distinctly to
barriers of technical, economical or other structural and cultural origin. Although broadcast and pay TV still yields by far the largest share of exploitation of TV contents, signs are for change. TV companies should use their strengths in building up relationships because of their high competence in creating emotion and involvement. In the course of the thesis its being demonstrated that they are lacking capabilities to develop thoroughly and sustainable better relationships to their audience. It is being recommended for them to increasingly acquire resources that are not only asset driven, but aim to support engagement in the relationship business element of networked media of the future. By improving customer relationship, the degree of control enforcement will loose its exclusive importance.
Arguable approaches are shown in the following depict.

This assessment frames two central dimensions of change being discovered in the thesis. Competency in relationship engagement with audiences on the y-axis and channel control or degree of customer ownership on x-axis. Those two dimensions shape basic occurrences of business approaches and draw the line between the traditional media model and the new, networked media environment. The arrow describes the evolvement of the business models and indicates market lifecycles from maturity (broadcast) to introduction (broadband TV).
In the paper it is suggested for media companies to incorporate “three pillars of the paradigm shift” (Business logics, Service Types and Business models) to their strategic agendas and thus to their innovation processes.

For mastering the manifold challenges of a networked, heavily Micromedia influenced and thus hyper competitive TV landscape, they will clearly need to perform better on the variables that determine industry disruption.

Michael Arrington of Techcrunch investigates Web 2.0 for it´s bubble characteristics, interviewing startup CEOs and executives.
Participants are Aaron Cohen (Bolt),
Scott Milener and Steven Lurie (Browster),
Keith Teare (edgeio),
Steven Marder (Eurekster),
Joe Kraus (JotSpot),
Jeremy Verba (Piczo),
Auren Hoffman (Rapleaf),
Chris Alden (Rojo),
Gautam Godhwani (Simply Hired),
Jonathan Abrams (Socializr),
David Sifry (Technorati),
Matt Sanchez (Video Egg)
and Michael Tanne (Wink).

Here´s the piece (perfect chance to give a try to Brightcove)

The following article is taken from current study project “The advent of IP to TV” prepared for the School of Management and Information (SMI) at Steinbeis Hochschule Berlin by Nikolaus Reinelt, Master candidate Media MBA, Class of 2005. See here for TOC, study paper partly available on request.

Taken a long term perspective, it is most likely that [IPTV and its] nascent closed and managed networks establish on the market. Bundled Triple Play offerings will fill up customer bases of IPTV providers and lock them into prepared service packages. Main competitive advantages for IPTV providers in this scenario stem from their Walled Gardens capability of ‘one face to the customer’ billing relation and their lean back product shaping. For telcos and cablers this implies also the saving from the decline in revenues of traditional core businesses. In best case even new customers will be attracted. Cablers and other access providers have to catch up (or, in some markets, take care not to fall back) with their own service bundles and work fiercely on the deployment of interactive enhancements of their offerings if they want to stay up-to-date with the interactive scalability of IP enabled platforms.

A core driver on open systems and broadband TV will be Microsoft. The Media Center has captured a key position in their end-consumer strategy, meaning that it will be marketed strongly, not only in terms of its TV features, but also as a one-stop entertainment device. Issues of intercompabilty and interface design will determine acceptance and herefore intensity of market pull for PC oriented solutions. X-Box and Playstation will have another stake in the embrace of business models for the reconfigured media environment by finding their particular role in the comfort zones, either outranking or complementing other solutions.
Decision makers in their projections should always be aware that the attention span of customers is not endless and after having decided for one or two services, the consideration set already will be fairly well-served. The economies of attention require value capture to be understood as a function of attention scarcity. Companies will prosper, if they can realize scale and scope effects in production or distribution for an efficient allocation of the scarce attention.

For a start, in the era of participation, new media will co-exist with old. It is indeed already increasingly hard to tell when one becomes the other. True, ever more people will upload short video clips to one of the many content aggregators or contribute in peer production activities. But that is not going to substitute the creative wizardry of a Steven Spielberg or the journalistic competence and value of the BBC’s great network of reporters. Instead microchunked media will offer many possibilities for differentiation of content providers and platforms At the same time it will be contributing to the disruption of wide parts of the media landscape. Especially when hurdles for accessing broadband connected PCs will be diminished and new platforms to control value capture will emerge. As we move from broadcast model to narrowcast (or multicast and point-to-point) many interactive services or business models have to be tried out.
It is just rational that broadcasters in this shift follow a bimodal strategy. Providing contents for fluid media experiences on disparate channels is part of the larger strategic adjusting to the afore mentioned intermediary role. Cooperating with gatekeepers of the new distribution hubs (IPTV providers, payTV operators or internet start-ups), they are placing an open bet on the various modes for incorporating the audience, no matter what happens. At least they will gain time to adapt their processes and structures before the next level of convergence between PCs and televised entertainment is reached.

The difference in the advent of IP to TV compared to the days of yore of interactive television is that now, driven by technical progress and convergence, core businesses of market players are being threatened and consumer behavior has evolved in a larger context to more individualization and fragmentation. Penetration of the internet and its undisputed benefits accelerated learning and strengthened demand for true interactive services.
All trends listed in this paper already imply inherently most assets of the broad interactive television term: On-demand content, user interaction on backchannel, Walled Garden services, EPGs and others. IPTV can thereby under many aspects clearly be considered as interactive Television. Taken the fact that iTV is an umbrella term for any form of interactivity involved with television sets, it does not surprise that there are more than 50 definitions attached to iTV and nearby topics. The view held here is that true interactive television puts needs of viewers for interaction through an enhanced television experience in the middle. An interaction that is executed by an integrated backchannel. Interactive television over IP is, due to its disruptive nature and its technical proximity to the internet, a promising approach to solve the situation between broadcasters/distributors/CE-manufacturers that paralyzed many markets for a long time.
IPTV is as such interactive TV although not through the backdoor - it will be coming to homes right next to its own backchannel.

Lately i found a decent approach to conceptualize business logics, that lay within TV over IP solutions. Munich´s university LMU is researching with their project intermedia in this realm. They´re approaching the convergence topic with an interdisciplinary team from economics, communication and computer sciences. Particularly interesting for me is the economic and organizational perspective, namely represented by Prof. Picot, who is well renonwed for his work in information technologies impact on organizational structure (note for example his last book on virtual cooperations.)

Business web of MSTV TV over IP solution (Intermedia LMU Munich 2005)

In this illustration, the grade of stickyness to the technical IPTV solution in the regard of being a core business or strength is been descriped as shaper>adaptors (inner/outer) and independent adaptors (affiliates).
Opposite to the MS business web, Cisco’s efforts to build an propriatary network looks like this.

For more on MSTV’s strategy and their ‘ecosystem’ see this article (german).
Complete, very clear and comprehensive presentation can be found here.