Nice quotes from the Wall Street Journal on the current triple play battle between phone companies, optical fiber service providers and cable operators. This is a great article as it pumps up different new key insights (like the Akimbo example). And its insights might even be relevant for wireless service providers with their walled garden approach and upcoming triple play offering for mobile. The only thing that is really missing is the pivotal role of home networking technologies like WiFi to differentiate triple play offerings. Overall, at this point I would bet my money on the phone companies as they have a more entrepreneurial mindset and offer more creative bundles to consumers relative to cable operators, especially with wireless operators.
"But there is one thing many consumers want that the industry is in no hurry to deliver: an easy way to gain Web access from their TVs. While gadget freaks can already do this, most cable operators would prefer that the Internet and TV remain two separate experiences -- and revenue streams -- for everyone else. For programmers, total integration would open the door wider to file swapping and piracy. For cable operators, it raises the specter of viewers going directly to content providers for shows and films, bypassing the middleman. But the Internet is coming to TV whether cable companies like it or not. Phone giants like SBC and Verizon plan to deliver their signals using an Internet technology known as IP TV. While cable companies broadcast all their channels at once to the TV, blocking those that aren't paid for, with IP TV, SBC and Verizon will deliver only programs that viewers request. That essentially makes a limitless amount of content available, just as there's no cap on the number of Web sites.
But because of the breadth of the Internet, IP TV presents intriguing ways for phone companies to distinguish themselves from cable companies. Individuals are putting up more and more unconventional content on the Web using such vehicles as video blogs. Phone companies could easily make this content available on TV. While most of it will be pretty boring, with the right search engine, it could turn into the ultimate reality show.
Start-up businesses like Akimbo Systems are already planning ways that wannabe producers can upload their videos and even share in the revenue when TV viewers buy the content. "It will do what eBay has done for retailing," boasts Josh Goldman, Akimbo's chief executive.
Will cable operators respond to this threat with a comparable service? If history is a guide, the industry will probably wait to see how IP TV works out for the Bells. Most cable operators are notorious for being technology followers rather than leaders. The most notable advances of the past decade, such as digital channels and digital video recorders, were pioneered by satellite TV businesses.
Certainly there was little sign at the Moscone Center that cable operators are worried about phone companies leapfrogging them in the TV business. Most cable companies plan to switch to IP TV technology eventually because it's a more efficient form of transmission and will combine more easily with their Web-based phone and broadband services. But clearly they're in no rush.
In the cable industry's defense, the show was packed with the broad array of new services that companies are rushing to market, including phone, high-definition TV and video-on-demand. The industry's strategy reflects its strength as the dominant provider of TV and high-speed Internet hookups, well positioned to muscle into the phone business much faster than the phone companies can expand into TV. Executives are confident subscribers won't defect as long as companies keep loading them up with new services.
"The danger, of course, is that IP TV gives phone companies the tools to innovate better. A few speakers did predict that rapid technological advances would create unprecedented challenges for cable companies. But not surprisingly, many of these warnings came from executives at companies that work with both camps."