Launching a successful IPTV service. Launching an IPTV service is a long, expensive and challenging project for any telecoms operator, be it an incumbent or an alternative provider. It requires clearly set objectives; appropriate financial and human resources; technical, commercial and content know-how; a sound strategy; and careful planning. This presentation provides SVP Advisors view on how to turn an IPTV project into a success, with recommendations and real-life anecdotes gained from our involvement in several IPTV operations and advisory projects.

1. LAUNCHING A SUCCESSFUL IPTV SERVICE
SVP Advisors
For further information please contact:
Dimitri Kallinis (dimitri.kallinis@svpadvisors.com)
www.svpadvisors.com
RETHINKING communications

2. Significant value can be added throughout the IPTV lifecycle
Assessing the Launching the Maximizing
opportunity service revenue
Market & Commercial
Technology Strategy review
Review
Gap analysis Planning Profit analysis
Service &
Project content
Positioning
development optimization
Testing & Revenue
Objectives stimulation
go-to-market
2 Madrid, 2009© SVP Advisors

3. The objectives and targets set the framework for service launch
MARKET CHARACTERISTICS OBJECTIVES BUSINESS TARGETS
Become leading
• Low Pay TV penetration provider of
• Strong TV consumption premium TV
content ARPU
T
V
• Hi Pay TV penetration Differentiate TV CONNECTED
offer with HOUSEHOLDS
• Poorly differentiated offer innovative IP
based services
• Low BB penetration Accelerate
penetration of BB
• High connection speeds (>6Mbps) the BB service MARKET
B SHARE
B Differentiate CHURN
• High BB penetration value proposition RATE
• Service seen as a commodity
to boost sales
and retain
customers
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4. The IPTV strategy is built around four pillars which are highly
dependent on each other
IPTV Platform Provisioning
Set-Top-Box EPG
Architecture Graphic Interface
Customer
Infrastructure
Experience
IPTV
STRATEGY
Commercial Content
Packages VoD / SVoD
Pricing TV Channels
Advertising VAS
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5. The choices of the platform and the system architecture are both
very critical …
IPTV STRATEGY: INFRASTRUCTURE
IPTV PLATFORM ARCHITECTURE
• The IPTV service is delivered
through a multi-layered
Content Head-End Live platform made of several
Ingestion TV integrated modules
• As a rule of thumb the
Subscriber
Security Set modules should be:
User
Conditional Top
Interace • Highly scalable
Access, Middleware Box
(SUI)
Encryption, • Open to support multiple
DRM
contents and services
• Able to guarantee
VoD & Content Delivery Network maximum service security
Systems & Service monitoring
IP Access Network
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6. … and depend on the objectives, available resources and time
requirements of each specific Operator
IPTV STRATEGY: INFRASTRUCTURE
Multiple Vendors
Closed Single Vendor Open (Ericsson, Thomson,
(e.g. Microsoft) Platform Independent
Platform Providers,…)
• High upfront, scalability, recurring costs • Low upfront and maintenance costs
• Small internal engineering team required • Internal engineering team is mandatory
• Easy and relatively quick to go live with • Strong capability in driving service
featured platform’s services roadmaps, defining functionalities and
service range
• Services and functionalities directly
dependent on product release roadmaps • Flexible and easy to customize
• Long and uncertain response time on new • Responds effectively to new service
product and service requirements additions and expanding customer base
Examples: Swisscom, British Telecom, Bell Examples: France Telecom, Belgacom,
Canada, Deutsche Telekom Fastweb, Telefónica, Free,
6 Madrid, 2009© SVP Advisors

7. The customer experience begins with the installation of the Set Top
Box and the provisioning of the service
IPTV STRATEGY: CUSTOMER EXPERIENCE
Connection • The installation of the STB
cost ($) (connection to network and TV
set) must not be underestimated
On site “full”
installation
(includes
internal wiring) • It is not uncommon for operators
to discover that a relevant % of
On site “light”
installation delivered STBs end up
(courier + unconnected
demo)
• In general, the higher the
Telephone
assisted installation cost the greater the
installation % of STB connected
“Plug and • A good solution could be to offer
Play” solution various options to the customer
to choose from
% of STB connected
over provisioned
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8. A functional and captivating User Interface is essential to achieve
high levels of service usage
IPTV STRATEGY: CUSTOMER EXPERIENCE
An efficiently performing User
Interface shall:
• Include graphics which are directly built
upon the selected STB …
• … and have been conceived explicitly for
a TV user environment
• Be simple and quick to navigate …
• .. and present a pleasant “look and feel”
• Effectively help users to find the content
of their choice among hundreds of titles
and service applications
• Strike a good balance between strong
interactivity and the smooth operation
of the system
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9. The number of existing and potential subscribers determines the
quantity and quality of the content offered
IPTV STRATEGY: CONTENT
Content value ($) ILLUSTRATIVE
Acquisition of
premium TV rights
(rare)
Own TV channels
(e.g. Sports)
VoD Library Premium TV
(Hollywood and channels
local titles) (localized version)
Premium TV
channels
(int’l version)
TV Games
FTA TV channels (casual games e.g.
(National and Tetris, Solitaire, …) VAS (e.g. catch-
International) up TV, HD, etc…)
N of subscribers
Service
launch
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10. Each type of content should be approached in a different way
IPTV STRATEGY: CONTENT
• Diversify the offer in terms of title, age (current, library, classical) and genre
• Refreshment rate and number of blockbuster titles are key success factors
VoD • Expect to pay high minimum guarantees and revenue share above 50%
• No (or very small) fees are usually paid for FTA channels
• Int’l versions of premium channels are sold for a flat fee or a fee/sub/mth
TV
• Localized versions (subtitled, dubbed, voiceovered) always require a premium
channels
• Catch-up TV and time shifting can become your killer applications
• Usually an “all-you-can-eat” model works best for TV Games
VAS • There are (too) many VAS on offer – only very few can make an impact
10 Madrid, 2009© SVP Advisors

11. The commercial offer can vary considerably as a result of the
content offered and the TV market characteristics of each Country
IPTV STRATEGY: COMMERCIAL
Thematic Premium
A la carte All inclusive
packages packages
VoD Pay per view Pay per view Pay per view
(pay per view)
All premium
Sports TV channels
Premium TV All premium +
channels Documentaries
TV channels
All VoD titles
Kids
+
Unlimited
Currents
Subscription All VoD titles plays
VoD Library +
All FTA
TV Games Pay per game Unlimited plays Unlimited plays channels
+
FTA TV VAS (if any)
National + Int’l National + Int’l National + Int’l
channels*
Level of content aggregation
* Often included in the entry/basic TV package (free of charge, e.g. part of a
triple play bundle, or for a small monthly fee)
11 Madrid, 2009© SVP Advisors

12. The IPTV launch is a long project consisting of many activities
grouped in four phases and involving several departments
Concept Development Pilot Launch
• High-level • Systems • Friends & Family • Soft launch
service definition purchase and (100-200 users) (optional)
integration
• Platform (or • Limited content • Commercial
modules) • STB purchase and functionalities offer (service
selection and testing (offline) bundles, promos,
etc…)
• RFP to vendors • User interface • Data gathering
design and elaboration • Marketing event
• Draft budget for
investments and • Integration with • Fine tuning of • Media campaign
content costs network and IT full scale
(CRM, billing, deployment • Sales
• Internal product OSS)
requirement
Content acquisition and aggregation
Time required to complete the process: minimum 6 months
12 Madrid, 2009© SVP Advisors

13. SVP can help Operators make the most of their IPTV service
We are ideally placed … … to add value to IPTV services
Our Consultants have developed a We can leverage our outstanding track-
unique set of skills and gained record to help Operators make their
unrivalled international experience IPTV service successful.
on IPTV thanks to work carried out in:
We are equip to undertake an
• Technical and commercial IPTV assortment of assignments during the
operations in 5 large European various phases of the IPTV service
Countries lifecycle - indicatively:
• Advisory projects for Operators and
projects on behalf of financial • End-to-end project support
institutions • Business planning
• Int’l benchmarking
Furthermore, our Consultants form part • Content acquisition & aggregation
of an extensive business network of:
• Commercial offer definition & review
• Service bundle maximization
• Content providers and aggregators
• Profit analysis
• Vendors and IPTV solution providers
• Revenue stimulation
• System integrators
• Regulatory support (for incumbents)
13 Madrid, 2009© SVP Advisors

14. Any questions or comments?
Please contact:
Dimitri Kallinis
Partner
dimitri.kallinis@svpadvisors.com
Address:
C/ Almagro 15, 5th floor
28010, Madrid
Spain
Telephone number:
+34 91 310 2895
Fax number:
+34 91 141 28 11
2009 © SVP Advisors STRICTLY CONFIDENTIAL