The battle for broadband

Adam Woods reports on how a broadband war is looming, which will open up media opportunities, as content providers plan their multi-delivery packages.

More often than not video content, when delivered online, is pitched as an enjoyable add-on for those wanting to see what their broadband connection can do. The invitation is a low-pressure one: come and see what's possible these days, have a mess around - it's all free. But lurking behind the fun diversions of so-called web TV is an altogether more serious strategy, piloted by broadcasters, telcos, ISPs and content owners, to turn the broadband connection into the next major content delivery channel. And, where content goes, commercial opportunities open up

In February, Ofcom announced that there were 10 million subscribers in the UK, adding that new households were entering the high-speed internet world at a rate of 80,000 a week.

But where broadband has been a premium product, competition and the speed of its growth is rapidly reducing it to the status of a utility - leaving the major players looking for new ways to make it earn its keep.

"What you have is a lot of broadband companies looking at ways of generating more revenue from their customers, because there is very little money to be made from just offering broadband," says Chris Williams, telecoms spokesman for comparison service uSwitch.com.

Aggressive price competition from suppliers like Carphone Warehouse has left those who previously thrived on broadband searching for new revenue streams. Potential service offers range from data services such as VoIP and video conferencing to full-blown VOD and streamed television broadcasts.

The first major launch from a telco will be BT Vision's Freeview Plus service this autumn; though numerous content deals have been unveiled, details of the finished service are yet to be publicly announced. A complicating factor is that no two players are approaching the market from the same position. As Alex Cameron, managing director of broadband content aggregator Digital TX, puts it: "When you have convergence, it is almost impossible to label anything."

So who looks set to win the battle for consumers' viewing? Sky is the only proven broadcaster among a gaggle of ISPs and telcos sizing up the market as potential distributors, but it has limited experience of broadband delivery.

Through its alliance with Freeview, BT appears to have the most rounded proposition, but its convincing reincarnation as a broadcaster and content aggregator cannot be taken for granted.

NTL, Tiscali and Orange's Wanadoo, which is rebranding, of course all have their strengths in terms of branding and positioning, but no one is quite sure how any of the UK's ISPs plan to make the leap. Some even deny having any firm plans to do so, but as the margins involved in broadband get narrower and narrower, there will be a lot of large companies with important decisions to make.

THE CONTENT PROVIDERS

The BBC's plan to begin transferring its vast archive online is a dramatic show of faith in the new broadband TV platform, but ITV and Channel 4 are also toying with free and paid-for web TV models.

Various trials orchestrated not just by the BBC, but also by ITV Local, are already giving a few select consumers access to live TV streams.

Most digital broadcasters have found some experimental outlet for their content on the web. In March, MTV launched its Overdrive channel, allowing VOD access to music videos, live performances, trailers and full-length shows and C4 is streaming episodes of Lost, initially for free and subsequently for 99p a go.

Flextech's channels have aired on NTL/Telewest's Blueyonder TV service, while ITN is part of the MSN Video Player line-up. Throw online-only channels into the mix and highly interactive video sites such as YouTube and Google Video, and there is no shortage of content for the avid broadband user.

THE JARGON-BUSTER

Broadband TV: A catch-all term to describe video content fed down the broadband line, either as a continuous stream or as a VOD (see right) offering, to either a TV or a PC

Internet Protocol Television (IPTV): Standard TV and VOD content delivered exclusively to a television via a high-speed broadband line

Triple-play: A package of TV, broadband and telephony services, supplied by a single provider and charged via a single bill. Quadruple play sees the addition of mobile services

VOD VIDEO ON DEMAND

Voice over IP (VoIP)

A telephone service that transmits calls over the internet

Web TV

Video content delivered via the inter-net exclusively to a home computer.

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