General

Kasenna Says ISPs Can IPTV

One provider of IPTV equipment is already working with ISPs as small as 19,000 subscribers.

by Gerry Blackwell [December 30, 2004]

Last week, we ran a story about set-top box developer in which a company executive cast doubt on the possibility of ISPs finding a place in the IPTV food chain. Some in the IPTV business disagree.

Mark Gray, chairman and CEO of IPTV turnkey system provider Kasenna Inc., tells a different and decidedly more optimistic story.

"I think there's a real opportunity for ISPs to get into this business and offer a good, reliable service," Gray says. "I think ISPs can be much more agile in their relationships with customers. Their involvement has been small till now, but I think it will increase in future."

Kasenna is both an aggregator of on-demand television content and developer of middleware technology. The company sells neither IPTV head-end equipment—the devices that convert analog content into IP streams—nor consumer set-top boxes, but it provides everything else a carrier or ISP needs to establish a video-on-demand service. That includes the content, the video server, network management systems and an application platform that has movies-on-demand and other applications built in.

The company will sell pieces of its technology for service providers to implement on their own, or it can provide a complete turnkey system. It claims to be the largest seller of IPTV video server and associated products, with a stunning 7,000 deployments worldwide, 70 percent of them outside the U.S.

Gray concedes that in the U.S., carriers that have deployed networks capable of supporting IPTV services have almost invariably wanted to develop and provide the services themselves. He points out that there are 1,600 mostly small, independent ILECs (incumbent local exchange carriers) in the U.S., and a surprising 120 to 130 of them have already deployed IPTV systems.

"In the U.S., it's the small carriers who are doing this," Gray notes. "The big guys are making lot of noise about it and issuing RFPs, but it's the small ILECs that are actually deploying systems."

In overseas markets, Kasenna has seen things unfold differently. In India, for example, huge state-run Bharat Sanchar Nigam Limited (BSNL) built the network infrastructure needed for IPTV, then made it available to ISP franchisees such as Atlas Interactive India and iSpatial Communications, which are using Kasenna solutions to offer IPTV-based services.

The same business model could work in the U.S., Gray believes, but ISPs themselves may have to take the bull by the horns.

"If an ISP walked into a carrier and said, 'I'll make this easy for you, I'll put the system in, I'll get the content, I'll manage it all and we can share profits,' I think a lot of carriers would jump at that," he says.

"We're not seeing a lot of ISPs coming to us yet, but there must be a few out there interested in trying this. We can show them where the money is, we can show where the profits are in this business—and how to avoid the pitfalls." And Kasenna can provide the content and most of the technology.

Gray concedes that ISPs don't know any more about the TV business than carriers. "But it's easy to learn," he insists. He argues that too many carriers have taken the wrong approach to IPTV. Many see it and the whole notion of offering triple play services—Internet, voice and pay TV— as a defensive play, something they're being forced to consider because competitors are doing it.

They should see it as the prime business opportunity it is, Gray says. They should take a "positive, aggressive" stance rather than a defensive one and embark on the venture with the idea of offering a service customers can't afford to be without. "There's only one thing required to succeed in this business other than a little capital and that's the right attitude towards the TV business," he says.

Still, many carriers are hanging back because they investigated the business in the past and concluded it wasn't possible to make money offering IPTV services. That was because they only looked at solutions that involved integrating many different components from different vendors and paying for the professional services required to do the integration work, Gray says.

Go to page two: A lower cost solution >