Internet protocol television (IPTV) is a market beginning to take off. In the last two years, some of the biggest telcos around the globe have announced aggressive plans to capture the video market. With telcos determined to capture a large slice of the triple-play market, one of the questions that has arisen is: What is the role for satellite players in this market?

Christopher Baugh, president of NSR, wondered whether the satellite operators would only be able to team up with smaller telcos and other niche players such as housing associations, and whether there was a demand from tier one operators to work alongside satellite operators.

While the pace of deals seems to be slow in the early stages, Vicky Warker, senior vice president, global marketing for Intelsat, believes it will ultimately make sense for larger telcos to use a satellite component.

"You have to look at what the tier one telcos will have to do, as their density begins to thin out when they leave those built up urban areas," Warker said in February during an "IPTV Via Satellite" panel at SATELLITE 2007 in Washington, D.C. If they want to have a broad level of coverage, some of those larger players could have a supplementation scheme that involves satellite."

At the moment, satellites and IPTV seems very much a U.S.-based opportunity with SES Americom and Intelsat leading the way. Intelsat announced a deal in February with Avail Media, which will use Intelsat’s MPEG-4 content aggregation and delivery service – Intelsat IPTV. SES Americom is also a player in this market.

Bryan McGuirk, president of media and enterprise services at SES Americom, also believes there is a strong opportunity for satellite players. "We take in 15 satellites worth of content, deliver it into a telco headend and take it all to the [set-top box]. It is really giving our partners a choice and offering a different path to market. We have 300 channels on our platform. We have six trials plus BellSouth as a customer."

While optimistic other commercial deals were on the verge of being announced, McGuirk admitted entering the IPTV business has been tougher than they thought. "There has been a lot of learning," he said. "You can’t predict all the twists and turns that come along. The integration of middleware, set-top-boxes and conditional access was tougher than we thought."

Hardware issues seem to be the root cause of many of the problems for telcos, apartment operators and other players wishing to deploy IPTV. Paul Kosac, vice president of market development, digital media networks at Scientific Atlanta, said, "When you look at cable and how long it took those players to introduce advanced video networks, there was a lot of complexity involved. It is the same in the IPTV space. There are numerous conditional access middleware vendors. The importance in this market is to partner with several companies that can build the elements. But satellite is an economic way of distributing high-bandwidth content. We are also at the first stage of delivering IPTV services."

Brian Morrow, COO and general manager, IPTV solutions for Eagle Broadband, added, "I think (the) IPTV market will be very different a few years down the road. We will see a change in the technologies. As the Web and IPTV capabilities become more integrated, you will be able to do some new things in terms of services to customers."

Despite the challenges, J. Armand Musey, president of Near Earth LLC, believes there are compelling reasons for satellite operators to enter the IPTV arena. "IPTV is a great use of C-band capacity. Prices are extremely low. The industry is looking for ways to use that capacity. It is one of the few high growth niche opportunities for satellite operators," he said.

While the officials seemed to agree that IPTV was an interesting growth strategy for satellite players, it could prove tough to gain a strong return.

Just taking the United States as an example, Musey said, "You have around 90 percent of the population who have access to cable or [direct-to-home] services in the U.S. To succeed in this market, you have to offer something better or cheaper," he said. "It will be a real uphill battle to get customers to change. You need video operators to say they want to do it. We really need to sell them on a killer application."

One of the questions for the industry is whether satellites and IPTV could be an international opportunity. "I think one of the things (is) that the U.S. is one land-mass, one language, etc., so the dynamics for satellite and IPTV are strong," Warker said. "When you look at Europe, and to a lesser extent Asia, there are smaller countries, different languages, different channel line-ups, etc. The IPTV players in these markets are typically large telcos. So it makes things more difficult. Having said that, I think there are opportunities in Eastern Europe as well as some parts of Asia."