Ben Foster, VP of Sales and Marketing for Twin Valley Telephone, an early adopter of franchised IPTV explained how their system has achieved take-rates of 50 to 55% through bundling of local and long distance telephony, broadband and television.   Although they only make $3 to $4 per sub per month on their digital basic, this sets the foundation for additional margin features such as High Definition and PVRs. 

Foster explained that the in-home network, with its proliferation of noise-generating sources, such as furnaces and exercise machines, is as much of a challenge as the outside plant network. 

The Outside Plant Network is important as Catherine Button of Pannaway pointed out that the need for bandwidth is rapidly growing. She cited FTTH Council information that suggested that by 2010, the high-end capability of ADSL2+ will barely meet the lowest expected network bandwidths. As a result, Button suggested that FTTH is viable for not only greenfield (new infrastructure) deployments, but many brownfield (rebuilds) deployments as well.      

Shane Pierce of Falcon IP Complete explained the nuances of content acquisition and the various rights required from transport agreements (getting the content to the headend) and distribution agreements (right to distribute to consumers). He suggested that third-party aggregators streamline the process of obtaining distribution agreements to 60 to 90 days from what could take several years if negotiated directly with the content providers. 

Northeast Nebraska Telephone is one such company that is using an aggregator, NRTC, to offer IPTV. Northeast Nebraska Telephone has 14 analog cable systems that they found difficult to maintain and challenging to keep up to date in terms of providing competitive programming line-ups. They felt that a move to IPTV would help them spread the costs of their network over more services, while providing a better product to their customers. 

So I am standing in the return line at a major Silicon Valley, big box retailer last night and a conversation with a late twenty-something guy, who is standing next to me, ensues. As it turns out, he is a current customer of AT&T’s U-verse IPTV service. Like my earlier video interview with uVerse customer Mark Snow, he seemed to be most impressed with the value of the service – i.e. how much he got for what he pays. 

He was impressed with the number of channels he receives and was especially pleased that the NFL Network was included as part of the bundle and didn’t require an additional charge like Comcast’s service does. Quality of the service did not seem to be an issue, although he did lament that he could not have two DVRs. He also complained that the VOD offering was nearly as broad as what Comcast offers. 

As far as new features, he says his girlfriend is the one who actively programs the DVR. He believed it was possible program the DVR by cell phone, but said they had never tried this feature, as they didn’t see any reason to do so. He also thought that the AT&T salesman had told of him a feature which he didn’t believe was possible (his words were “BS”). The feature was multiple viewpoints, where the customer could pick the camera angles. I told him that will be possible at some point. He expressed his desire to use this sort of feature for sporting events. 

Overall, he seemed to have a favorable impression of the service, as he expressed disappointment that he will not be able to receive it when he moves a few miles away from his current residence. 

As reported previously in the Viodi View, Communigate offers a a communications suite, based on Adobe’s Flash and Flex 2 technology, which promises to integrate communications and multimedia applications via multiple devices, such as computers, cell phones, personal digital assistants and IPTV set-tops. This approach of software as a service is ideal for the SOHO or small business looking to offload some or all of the hassles and costs of I.T. support. 

In short, software as a service makes for more sticky customers. On a personal note, having used software services such as Google (mail servers) and Oracle’s Upshot (Customer Relationship Management), I am convinced that most small businesses will migrate to this approach over time. Software services could be great addition to a telco’s broadband bundle.