With the telecoms industry looking to IPTV as its golden ticket to finance large-scale fibre-optic broadband roll-out, a new study by management consultancy Arthur D. Little warns that without a single, global IPTV standard, the industry’s silver bullet could fail to deliver. According to "Open standards for IPTV Set-Top Boxes," with a variety of internet-ready consoles already in the home (gaming platforms, PCs, DVD players), the industry has yet to reach a consensus as to which device will serve as the hub for delivering IPTV.  
Mass-market take up of IPTV via set-top boxes (STB’s) is the industry’s best chance of funding large-scale fibre broadband infrastructure, so ensuring the STB becomes a universal household fixture must remain a top priority for telecom regulators and players along the supply chain.  "With no widely accepted standard for delivering IPTV, the industry risks lower interoperability and higher costs,” said Erik Almqvist, partner and head of Arthur D. Little’s Telecommunication, Information, Media and Electronics (TIME) Practice in the Nordic region. "In some cases proprietary solutions can solve this problem, but for the set-top box no proprietary standard is emerging that can achieve sufficient acceptance to drive global demand." Based on analysis of the global IPTV market, Arthur D. Little believes that an open approach to developing STB standards is the best path to achieving rapid price decreases and mass-market distribution, provided certain conditions are met and risks are effectively mitigated:

  • Negotiation and cooperation - manufacturers, operators and existing standards bodies must commit to substantial early investment and compromise based on the promise of major market growth once the standard is adopted
  • Innovation - developing an open framework with multiple version functionality will allow future innovations to be retrospectively compatible
  • Security - open standards’ detractors point to the risk of “hacking,” however this security threat exists with any popular standard - proprietary or open
  • Corporate and geo-politics - to avoid being steered by the agendas of financially or politically-powerful players, the standard must be developed by a globally representative body of technology providers and operators 
  • Intellectual property - patent holders must agree licensing terms that ensure the equipment costs are not unduly burdened by Intellectual Property Right (IPR) costs
"Open standards" is now available for download at www.adl.com/open_standards

Notes for Editors

About Arthur D. Little 
Arthur D. Little (ADL), founded in 1886, is a leading global management consulting firm that links strategy, innovation and technology to master complex business challenges while delivering sustainable results to our clients. Arthur D. Little has a collaborative client engagement style, exceptional people and a firm-wide commitment to quality and integrity.  ADL is proud to serve many of the Fortune 100 companies globally in addition to many other leading firms and public sector organizations.

Further Information

Say Communications
Tel: +44(0)2089716411(07)
E: adl@saycomms.co.uk Erik Almqvist
Director Head of Telecommunication, IT, Media and Electronics in the Nordics
Tel: +468-5030 6500/6545
Mob: +46708 83 0045
E: almqvist.erik@adlittle.com