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TM’s 3 and 10 play

March 23, 2010

From the Malaysian Insider:

Where TM’s IPTV service could have an edge however is in the video-on-demand (VOD) service where it has signed up with Sony Pictures, CBS and Disney-ABC. The IPTV service moreover is not being offered in isolation but as part of a “triple-play” package comprising voice calls, video (IPTV and VOD), and high-speed Internet starting from speeds of 10Mbps and upwards.

IPTV and VOD (over the internet) at speeds of 10Mbps and upwards? Really? I wonder what the theoretical maximum for the downstream speed is… because 10Mbps sure isn’t going to give you quality IPTV.

Unless of course they’re not intending to deliver HD quality streaming. If that’s the case, I think that their case for paid-content over the internet becomes severely hampered.

They do have the advantage in it being bundled as part of a triple-play service – hardly innovative by the way – which gives them a chance to rack up some gullible accounts.

In any case, what I find really surprising is that OSK Research (the analyst firm quoted in the article) failed to mention that all Astro has to do is to introduce digital recording capabilities to their customer base, by way of upgrading current boxes in the home or for new installations.

With an entrenched customer base and the added capability for time-shifted programming/viewing (which is really what ‘on-demand’ is about), there is no real risk for Astro that its customers will go flooding towards TM.

I say this because of 3 very simple reasons (among many others):

1. Medium of delivery

IP loses to satellite, even at 10Mbps (as a minimum). If everything else were even (see 2 and 3) and the ‘pipe’ was the only competitive factor, then 18-20Mbps (downstream) would be the absolute minimum needed to at least be on par with satellite/cable delivery.

2. Bandwith

In the scheme of things, the consumption of content over the internet has been restricted more by bandwith than speed. In fact, speed is a much easier and cheaper problem to solve than bandwith is. There is no point having lightning speed internet connection when you’re limited to a 1Gb or 10Gb cap p/month. You’re effectively crippled.

“We have 100 000 movies in our catalogue that you can watch on-demand. But guess what? You can only watch 2 a month”.

Yeah… that’s a real killer sales pitch right there.

3. Content

This is the biggie. By far the biggest attraction and selling point for cable television has been live entertainment.

That means live sports or live events (like the Academy Awards or the Emmys).Everything else like news, MTVs or even movies, are just window dressing.

So even if you had the biggest pipe and the fastest download speed you can think of… it’s still empty without the content.

That last point – content – is the bane and saviour of telco companies all in one. Content is what drives usage and usage is what racks up the monthly billings for ISPs/telco.

In the rush to dominate this landscape – that of content and its delivery – many telcos will rise and fall.

Some feel they need to own, create or produce content to open new revenue streams. Others are happy facilitating the actual creators of content at arms length, opting instead to create a culture of abundance on the net and then thrive on increased consumption of data through their own pipes.

Personally, I believe that telcos should leave the content game alone. They should focus more on their own core business, which we all know needs more than 1 eye on it as it is… seeing that delivery in many countries is far from perfect.

Many telcos are already struggling as it is to maintain better-than-satisfactory service levels for communications to their current customer base. Adding content to that mix will just complicate things and give customers yet another thing to gripe about. And at the end of the day, what will it all boil down to?

Customers like me will choose an ISP/telco that focuses primarily on delivering and sustaining high internet speeds and very, very low bandwith costs… and do it well.

That leaves me free – of constraints and complaints – to go hunt for all the content I want on the internet that I can get almost instanteneously, on-demand and at a price that I am willing to pay for.

And I can do all that because of a great ISP. See how the circle turns? Go figure…

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