The world of IPTV is divided into the Haves and the Havenots. The Haves have massive existing footprints, millions of viewers or customers and tons of cash in the bank from their traditional cash cow businesses. Count Sky/DirecTV, Comcast and NTL/Telewest amongst these giants.
Largely, their businesses are about farming and extending their installed base and increasing ARPU (average revenue per user).
At the same time there are many wannabes, from the major telcos to start ups. The problem they all have is inertia.
Until you have your first million viewers you're of limited interest to the top content owners, let alone advertisers. So, you have to fund the business all the way. In the UK, Video Networks was a trailblazer, offering an impressive IPTV service three years ago. However, it still has only 50,000 subscribers. It faces vicious competition from Sky, with 10 million viewers and the hugely successful free digital terrestrial service, Freeview, with a similar number of viewers, as well as newly merged cable operator NTL/Telewest. In the US there are a number of companies that have attempted to take on the incumbents. Akimbo has seen recent success in turning away from the consumer market and to reselling via AT&T.
IPTV is a potential graveyard and a bottomless pit for investors, so how can you take on the status quo ?
It seems that the key approach is that which worked in the publishing industry - start from a niche and build.
Advertisers are willing to pay more for niche audiences, content is often cheaper to source and audiences are fanatical. At Narrowstep we regularly see them viewing their favourite channels on a PC for hours.
So, rather than trying to package mainstream content, perhaps a more focused approach could work, with the emphasis on a single channel (and having other channels also available as a 'nice to have').
It's my feeling that certain viewers would be more willing to pay for Sail TV than for another collection of channels they already have or have little interest in.