Archive notice: This article was originally published on November 14, 2007. Links and embedded videos are preserved as part of the historical record.
Triple Play – telephoning, Web surfing and television via the Internet – is one of the miracle weapons in the telecommunications industry’s bundled offering. Telekom, for example, wants to offer not only 145 television channels, but also a virtual video recorder and a kind of video library on the Web. Anyone who chooses the Comfort Plus package including Bundesliga has to transfer a hefty 85 euros to Telekom each month. According to a report by Spiegel, the former monopolist wants to gain up to 200,000 subscribers by the end of this year, although the high-speed-network required for this has so far reached only about half of all German households. Later, this is to become a business with millions of customers.
Harald Summa, head of the Association of the German Internet Industry eco, does not want to “share without reservation the euphoria” that is new and also being fueled by other providers. Some experts already even see parallels to the flop that the industry experienced with the billion-expensive UMTS mobile communications technology. After all, most television viewers apparently feel adequately supplied with TV programming by cable, satellite or antenna”, Spiegel writes.
So far, neither the video-on-demand offerings on the Internet nor the attempts by other telephone companies to make IPTV popular have been particularly successful. “Alice homeTV, which has a comparable offering but is significantly cheaper and has been available to Hansenet customers in eleven cities – including Berlin and Hamburg – since 2006, has so far been booked by just 13,000 subscribers”, Spiegel reports.
According to Bernhard Steimel, Managing Director of the Düsseldorf consulting firm Mind Business Consultants, it is questionable where the revenue is supposed to come from: “Only one-sixth of direct cable customers can substitute their connection; the others would have to pay the subscription fee for IPTV in addition. The assumption that significant source of revenue come from the proceeds of a pay TV fee is also risky. In Germany, the barriers to this market have been very high for years – the weak penetration confirms this”, says Steimel.
There is some evidence that there will be no rapid substitution of present TV reception routes, but rather a coexistence of the old and new TV worlds. “The message that satellite dish and TV cable are superfluous is reminiscent of the reports at the beginning of 2000, when telephone systems were publicly smashed at CeBIT with the statement that in future there would only be IP telephony. Seven years later, ISDN telephone systems are still being sold, although IP communication now also has the necessary market relevance. Whether the telephone companies have the staying power and the right marketing concept for IPTV therefore remains to be seen”, Steimel’s outlook.
