Is IPTV real TV or something else? If you think, that’s a highly hypothetical question, you’re not following in the recent dealings and wheelings of Deutsche Telekom and DFL, the German Soccer League.
The dry facts. DFL sold the Pay TV and Free TV rights to the German Soccer League for a whopping 220 Million Euros per season to Arena, a subsidiary of a larger German MSO. Pay TV provider Premiere, for the last umpteenth years the single source of major league live soccer, got snubbed (and a decent rubbing on the stock market).
Meanwhile, Deutsche Telekom got an other asset from DFL. The Internet rights. So far, so good. But now it seems, DFL oversold a bit. Arena is claiming to have some IPTV rights, too – as long as they just stream their productions. And at the same time, Deutsche Telekom seems to have some plans with Premiere. Which, depending on the exegesis of the contracts, might reach pretty far. Just imagine something like an encrypted IP datastream, broadcasted via satellite to a tv settop box.
Seems like, DFL underestimated the power of the IP protocol. Obviously, DT wasn’t interested in paying 45 Million Euros for some PC based geek TV. What they’re already selling is a 49 Euro settop box for bringing IP-based VoD movies onto your tv set. The next step (coming this fall and this soccer season) is some real IPTV, based upon Microsoft’s tv foundation. Essentially, it’s a virtual overbuild (if you’re a cable MSO). Essentially, its tv++ (if you’re interested in the tv dimension of the technology). Essentially, it’s a heavyweight’s muscle play. In Europe, for defending the voice and high speed data access market. (For US carriers, it’s about securing voice and gaining on data.)
For rights holders, this means interesting times. Because new money is flooding into the market. But be aware. First thing: For the telco giants, premium content is merely a marketing expense, not a crucial business affair. A couple of years ago, the music industry saw mobile operators as the digital white knight. Until they realized something quite frightening: the EBITDA of a carrier like Vodafone equals the annual turnover of the wole global music industry. Ooops.
And as the DFL example shows: going digital means, that your traditional licensing models are going down the drain. Selling tv and online rights doesn’t make any sense anymore, if your tv has online access. We’ll have to find different ways to differentiate. Screen resolution might be a way to go here.