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During a review of a London-based communications company’s new high-definition video-on-demand offering through IPTV, researchers concluded that in order to compete with online DVD rental or device-based VoD services.

 

Researchers at Ovum (News - Alert) say they liked the IPTV offering from British Telecommunications plc for its quality – but found the range of content available lacking, among other things, and found that IPTV must provide a better quality of experience, not just cost-savings, in order to earn its piece of the market.

 

According to Helena Schwenk, a senior analyst at the firm, BT (News - Alert) – whose so-called “home hub” is pictured below – hampers its service by failing to provide instant access to requested HD films. They’re pushed to a hard disk located in the customer’s DVR, Schwenk said, and movies take at least five hours to download.

 

“The main problem is that it doesn’t represent a preferable alternative to either online DVD rental stores or the growing number of device-based VoD services that bypass network operators and take the content directly from Internet to the TV set-top box,” Schwenk said.

 

The IPTV market is a fertile one.

 

In one sign of the Internet’s widely discussed migration to a video-based space – a change that experts say will require major advances in video compression – nearly one in five U.S. households who use the Web watch TV broadcasts online, a recent survey says.

 

The figure marks a 100 percent increase from 2006, according to a pair of Manhattan-based agencies: The Conference Board, a nonprofit organization, and market research firm TNS (News - Alert).

 

Yet in order to seize a portion of the on-demand movie-watching public, IPTV operators must track their competitors’ offerings and offer superior quality, pricing and packaging, Ovum officials say.

 

“While IPTV providers strive to enhance linear TV with ‘advanced’ video services, Web-based options are also growing in popularity,” Schwenk says. “Over-the-top VoD products are becoming more advanced, with some – such as Apple (News - Alert) TV and Vudu – delivering high-quality picture and sound to the TV. Meanwhile, online DVD rental services offer both the convenience of postal delivery and a half-decent selection of HD titles.”

 

Also, she said, DVD delivers a better quality picture than many download services, and with instant streaming.

 

A focus on quality will be especially important in markets “with a good-quality, free-to-air DTT offering which consumers can supplement with some type of interactive video service,” Schwenk writes.

 

“This, after all, is the ‘hybrid’ model that BT and a growing number of IPTV operators are following,” she said.