The key to survival for independent Internet service providers struggling against giant telephone and cable companies is a four-letter word: IPTV.
At least that’s according to new media consultant George Burger, who told a conference of Canadian ISPs in Toronto on Tuesday that Internet Protocol television could be their savior – if things go right.
Small ISPs already deliver Internet access. TV delivered over the Internet “represents a new revenue stream for ISPs, and, most importantly, will let them put together a compelling strategy to compete with incumbents,” the Toronto-based Burger said.
Unlike the wide range of IPTV channels delivered by companies like BCE Inc.’s Bell Canada or Quebecor Inc.’s Videotron cable division, Burger said small ISPs should deliver packages of channels targeted at specific audiences – for example, certain age groups or those of a certain ethnic background.
Tying broadcast content to related Internet sites will make a powerful package to sell, he said, and let subscribers realize their dream of being able to watch whatever they want when they want.
The transfer of content delivery from phone and cable lines to the Internet “will make downloading of books and music pale by comparison,” he said.
But, he warned, it is likely too expensive and complex for independent ISPs to do this on their own, particularly negotiating with individual content providers.
Instead, if the cards play out right, he believes IPTV brokers will line up content deals that ISPs will be able to pick and chose from.
However, Burger added, there will have to be at least two key changes in the way governments and regulators control broadcasting: The interests Canadian content creators, who are protected by Canadian content regulators, can no longer be placed above the interests of viewers who want a wide variety of programming; and the hands-off attitude to integrated companies like Bell, Shaw Communications and Quebecor Inc. who own TV network and specialty channels as well as Internet distribution networks, should be rethought.
In issuing only conduct guidelines to integrated broadcasters, the Canadian Radio-television and Telecommunications Commission (CRTC) has opened the door — in theory – to price TV shows out of the reach of ISPs.
“That’s the real hurdle,” he said in an interview after his address “The regulators have to create a level playing field between independent IPTV providers and the supplier of content.”
The other choice, he added, is breaking up the conglomerates.
One ISP at the conference who is dipping his toes into IPTV is Ottawa-based Distributel Communications Ltd., which has about 100,000 subscribers in B.C., Alberta, Ontario and Quebec.
In partnership with a Chinese news service, he hopes to start an IPTV service aimed at Chinese Canadians by the end of the year.
Distributel president Mel Cohen said IPTV will be part of his services, along with IP trunking to business, Internet access and VoIP service to residents. “We’re very hopeful IPTV will be a big part of the mix.”