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Can Telcos Win The Battle For IPTV?

There's a battle coming between cable providers and telecommunications carriers for the nation's televisions. The former hold the high ground of an impressive installed base, while telecom carriers are coming to the field with Internet television (IPTV), a promising technology that uses IP to deliver television feeds and other services to consumers.

However, telecom carriers have a tough fight ahead of them. According to Forrester Research vice president Maribel Lopez, the author of the April report "Telcos' IPTV Reality Check," they're starting with some serious disadvantages, whatever the promise of IPTV.

"We're going to have multiple choices: many people with many pipes to you home and the ability to sell services," she says. "But it'll be another solid year before you see anything concrete from the carriers."

IPTV's principal selling point is not simply video quality or the range of stations available --- cable and satellite providers already have that nailed down --- but on-demand content and interactive features. As Lopez noted in her April report, IPTV providers could offer direct on-line interaction with voting-based programs like American Idol as well as real-time video shopping and games. Integrated communications options like onscreen call display and messaging and less flashy features like faster channel changing and use-customizable channel line-ups could, if anything, be even more attractive to customers.

The problem, however, is that none of these features, as exciting as they might be, may be enough to draw subscribers away from cable and satellite. "It is better television, but how do you market that?" Lopez asks. "It's like the Tivo challenge: many consumers just didn't get it. People who have it love it and don't want to give it up, but as a customer acquisition tool, it doesn't work,"

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