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Wednesday, September 27, 2006

A new way to do make money in IPTV...

...give your network kit away!

PacketVision is a very interesting startup in Reading in the UK (even if its name is far too close to video compression software company PacketVideo). It is taking standard off the shelf components, combining them with key software and producing networking equipment for the IPTV space that has the potential to change the economics of the business.
It has developed a 1U unit that can insert advertising into an IP stream on a local or even individual basis, fully interactively with full traceability, much like the Cherrypicker ad-insertion kit. But, because it is based on IP and a standard network processor from PCM-Sierra, it is a fraction of the price.
The interesting thing is that for the first customer trialling the system (in Alaska!) PacketVision is giving them the kit. And not just them. Anyone. And charging on a per-click basis.

This brings the Internet approach to broadcast. And as setting up the IP network is expensive, it will appeal to the operators. And it is possible because the kit is so much cheaper.
BUT - the really big thing is that becasue it stil owns this means that PacketVision can sell advertising to other people that use the infrastructure, not just the IPTV provider, again on a per-click basis. this becomes even more compelling with new IPTV models (see above).
So they are not a hardware company or even a software company but an advertising company!

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