IPTV's Rise Underscores Need to Reinvent Business Models

IPTV service is finally catching on in the U.S.market, according to new research from iSuppli Corp. The company found that U.S. service providers Verizon and AT&T reached 1.2 million subscribers by last year's end, up 295 percent from one year ago. Verizon, which got a head start on AT&T has the lion's share of subscribers.

The service providers are taking center stage this week at the NXTComm trade show in Las Vegas, where IPTV is one of several areas under discussion. The latest numbers from iSuppli show the big telcos have a long way to go in building their TV businesses. (There are 39 million satellite TV subscribers, for example, in North and South America, and the satellite providers are gaining new customers, despite aggressive IPTV marketing.)

The interesting point ia that the service providers saw their core business, voice traffic, undergoing transition years ago and are spending billions to reinvent that business and bring it into the Internet age by embracing IP and television. Another segment of the channel, VARs and solution providers, face the same challenge with the rise of SaaS and managed services, which leverage the power of the Internet to fundamentally alter the channel landscape. Luckily, VARs don't have to spend billions on capital investments to modernize their businesses. They do, however, have to envision how their business model is changing and adjust to the new realities. It's a painful gamble, but as the service providers have discovered, they may not have a choice.

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