for a successful IPTV deployment Overcoming barriers and hurdles - On Demand TV case - Chief Manager, Engineering Dept. Yasuyuki TANIGUCHI
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1 Overcoming barriers and hurdles for a successful IPTV deployment - On Demand TV case - Yasuyuki TANIGUCHI Chief Manager, Engineering Dept. On Demand TV, inc. 1
2 About On Demand TV On Demand TV, a broadband television service, distributes VOD and d multi-channel programs directly to the home, through NTT East/West s Flets Flets network service. Its subscribers need to connect the original STB to TV set. More than 5,000 SVOD titles, the largest in the Japanese market, are now available at only 2,100 yen per month. At only 3,150 yen per month, a combo service of SVOD & multi-channel program are also available. Summary of On Demand TV Company Name On Demand TV, Inc. CEO Hiroshi Kajiwara Head Office , Shibuya Shibuya-Ku, Tokyo Shareholders Nippon Telegraph and Telephone West Corporation ITOCHU Corporation SKY Perfect Communications Inc. Nippon Telegraph and Telephone West Corporation Established October 4th,
3 Service Overview On Demand TV provides IP based VOD and multi-channel program services on NTT broadband network called FLET S. Broadcasting Programs Internet PC TV Broadband access NW (FLET s Network) IP-Set Top Box CTU OndemandTV Data Center BUFALO On On Demand TV TV (Customer Terminal Unit) HUB VOD content Remote Controller Customer s home 3
4 On Demand TV Service Features and Advantages No.1 No.1 SVOD SVOD Provider Provider On On Demand Demand TV TV offers offers more more than than 5,000 5,000 SVOD SVOD titles titles ISP ISP Free Free Unlike Unlike our our competitors, competitors, On On Demand Demand TV TV does does not not depend depend on on ISPs ISPs User User Friendly Friendly GUI GUI Easy Easy to to connect connect Ease Ease to to use use High High Definition Definition Service Service On On Demand Demand TV TV is is only only provider provider who who provides provides High High Definition Definition content content in in nation nation wide. wide. Most of Japanese cable operatorsw cannot offer VoD service vs Cable vs Cable Difficult to offer VoD service technically vs Sattelite vs Sattelite Our features are very unique and difficult to follow vs Other IPTV operator vs Other IPTV operator 4
5 Partnership Systems Integrator Content Protection / DRM STB Manufacturer Technology partner User Interface Co-Sales Partner VoD Contents Provider Customer Support Center Data Center 5
6 In the near future... On Demand TV is looking to improve its service by gaining full benefit b out of its two-way way broadband network. SERVICE CD, DVD sales ticket sales character items TV shopping remote access face-to-face shopping video chat on-line video rental (VOD) multiple channel service TIME 6 EC, TC communication Advanced content distribution Fulfilling interactive capability - HD based service Better quality service recommend titles on-line gaming Video content distribution (VOD+IP-broadcast)
7 Current status of IPTV service in Japan IPTV service is now becoming popular. IPTV service s recognize rate is continuously rising. 50%(last year) 57% (this year)* IPTV subscriber rate is also continuously rising. 6% (last year) 8% (this year)* Content rights holder s s mind is now changing. New and premium content is started to provide for our service. Deregulation is on going. Copyright law changed. IPTV multicasting was not broadcasting from copyright law. But, with law change, multicasting is now broadcasting. Now, we can provide better channels more easily. IPTV Service is now becoming growing phase from startup phase! * On Demand TV s original survey 7
8 What will boost IPTV service market? Better content Customers expect newer and premium content compared to video/dvd rental Convenience No need to go to the store to rent / return videos You can watch videos anytime you want! Easy operation Good enough quality comparing with existing medias Japanese customers have strong request for picture / audio quality. 8
9 Better content Content holder s s requests are still high hurdles to clear. Content rights holder s mind is changing. So, many content right holders are thinking about providing their premium content. Good security But, premium content request strong security and solution good picture is key quality. of success. Customer and content holder request quick and timely provision of o f new content Time conscious premium content (sports content, music event etc) have started to provide to our service. Short turnaround time of preparing content is requested. But, also good enough picture quality is also requested. Continuous investment for preparing content environment is important. 9
10 Convenience Customers are using service at anytime! Even early morning, many customers are uses VoD system. System halt for maintenance is not possible. System s s stability and maintenance ability is very important. Content security system is very complicated system. So, one of most vulnerable points of system. Stable security From system operation point of view, regular system maintenance is required. solution is key of But security system s halt is service halt. success. 10
11 Easy operation Service uses many new technologies, and uses many type of STBs. IPv6 network technology Complicated security system But, for customers, who cares? Hiding complicated things from customers are really important. Easy installation. Same operation on different STBs. Customer who can not setup STB by themselves churn rate is 3~40% higher than other customers! Keeping customer operation simple and easy is helpful for customer satisfaction. 11
12 Content quality Providing High Definition VoD service was a big challenge. Competitors could not follow us yet. New codecs New STBs Higher bandwidth stream Higher bandwidth stream makes difficult to control of jitters etc. Our VoD server and security partner s technologies Reduce have developing very high flexibility. cost So, we could launch HD service very smoothly. and operating cost is KSF. Flexibility of system But, high definition is not special thing for Japanese component customers. technologies Many of TV programs are already becomes HD. are very important. Almost all areas are covered by High Definition broadcasting. Providing high definition content is not helpful for additional revenue. But it s s helpful for increasing customer satisfaction and differentiation from competitors. 12
13 Summary Bright future for IPTV business opportunity Japanese broadband subs, especially FTTH subs are expected to increase continuously. Although its history is very long, Pay TV market is still growing. Excessive price battle within broadband market. Average price of FTTH has decreased dramatically over last two years, which could be a big factor to drive IPTV. On Demand TV have better position for winning IPTV competition with w following 4 advantages. Biggest SVOD library Unique and User friendly GUI ISP Free High picture quality System s s stability and flexibility is very important for expands service. e. 13
14 Thanks! 14
15 Broadband Market Forecast Since 2001, Japanese broadband market has shown a rapid growth. ADSL was the main force in the growth. However, now FTTH is current main force. 25,000,000 20,000,000 15,000,000 10,000,000 10,300,000 10,800,000 6,305,597 3,410,440 1,757,716 FTTH ADSL 14,082,268 14,490,994 14,050,000 14,025,000 12,118,714 5,000,000 0 FY2004 FY2005 FY2006 FY2007 FY2008 FTTH 1,757,716 3,410,440 6,305,597 10,300,000 10,800,000 ADSL 12,118,714 14,082,268 14,490,994 14,050,000 14,025,000 * Ministry of Internal Affairs and Communications *2007- On Demand TV original Research 15
16 Content Business and Pay TV Market Forecast in Japan Online content market forecast Japanese Online-content market is still in early stages, but expected to grow rapidly Although its history is long, Japanese Pay TV market is still growing. 10,000 Pay TV market forecast 8,000 2,667 6,000 4,000 2,000 2,068 3,311 2,245 6,653 3,932 Cable Sattelite Research of Nomura Research Institute,
17 On Demand TV Business Opportunity and Forecast On Demand TV s s future growth is highly dependent on number of NTT s s FTTH subs. Recent figures of NTT s s FTTH subs has shown that its future is bright. NTT s s FTTH subs are rapidly increasing. Today, its number is almost 5 million and it s s still growing really rapidly! All FTTH subs are possible to access to our service. Growth of FTTH will drive growth of On Demand TV. Growth of On Demand TV will drive growth of FTTH. these two services cause synergy effect for more rapidly growth. Thousand of subs Service launched 0 Mar.05 Mar.06 Mar.08 17
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20 Service Plans 1. Initial Fee 5,250 yen($46.5) (Including 10% of Tax) content is provided as HD 2. Monthly Subscription Fee content without additional charge! Premium Plan SVOD Plan Monthly Fee: 3,150 yen ($28) (including TAX) Monthly Fee: 2,100 yen($19) (including TAX) Broadcasting VoD (SVOD) VoD (Option) Program Guide チャンネル VoD (SVOD) VoD (Option) Program Guide Multi-channel Plan Light Plan Monthly Fee: 2,100 yen($19) (including TAX) Monthly Fee 577 yen($5) (including TAX) Broadcasting VOD ( 見放題 ) VoD (Option) Program Guide チャンネル VoD (2titles / month) VoD (Option) VOD ( 見放題 ) 3. Optional Fee Option VOD: ~ 420 yen($3.7)/title (including Tax) Option Channel: Depends on program ex.2,100 yen/month 20
21 GUI Response With the support of SquareEnix/UIEvolution technology, a smooth & quick GUI response is achieved. 21
22 System Overview On Demand TV service is delivered over IPv6 Network of NTT East and West. On Demand TV Customer Support Center On Demand TV Data Center On Demand TV Data Center Back-End System VOD Server IP Streamer VOD Server IP Streamer ANY ISP M/W (SVCD) M/W (SVCD) IPv6 Network IPv6 Network Customers can chose any ISP for their PC internet service Set Top Box Set Top Box ANY ISP 22
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