Interview with Paul Berriman, Head of Strategic Market Development, PCCW, Hong Kong

PCCW is one of Asia's leading integrated communications companies. The now Broadband TV service was launched on the 26th of September, 2003. Within the first 12 months there were 360,000 customers in service. At the peak of activity, PCCW were installing over 2,000 customers per day. There are now over 420,000 customers in service.

Paul Berriman will be presenting at the IPTV Asia Forum on the 28th and 29th of November in Hong Kong. The PCCW service will also be demonstrated at the show, and delegates will be able to interact with the PCCW service.For more information about the IPTV Asia Forum pleases visit http://www.iptv-asia.net.

IPTV News caught up with Paul Berriman at the recent Broadband World Forum in Madrid and took the following interview:

What’s the current state of IPTV in the Asian market?How do you see the rest of the regions rolling out IPTV?

Most Asian operators are currently looking at IPTV, and most are looking to start with on-demand services, either because that’s what they believe they should be doing or they are constrained by regulatory issues such as Korea, who can’t do the broadcast TV without the licence. I think PCCW are the only ones in full commercial deployment, although there are some other deployments going out in other parts of Asia which are just getting started in trial mode.

PCCW are looking to role out interactive TV, how do you see it as complimenting the existing mix of services that you provide?

We have to move from access to content and transactions and applications so as part of that we see the TV becoming another terminal device in the home, possibly easier and more convenient to use than the PC, and for a wider part of the family group to use. 

We are introducing a service next month where we have a complete channel dedicated to movie trailers, and we’ll be working with one of the lead cinema groups in Hong Kong to allow them to buy tickets online so you can see the movie that you want and then you go into the interactive mode, it allows you to choose the cinema, the time, it’ll then give you a seating plan showing you which seats are taken and you can pick between the seats you want and then buy your ticket. That’ll be the first real interactive application.

There are lots of other interactive applications already for services that we provide, such as the traffic channel, the weather channel, and going in and subscribing online and checking your bill, but this is the first real third party transaction capability that we will have on TV.

And what about on the advertising front, would you be providing interactive TV advertising?

You could actually say that this was an advertising channel, so it will be a development of that. The idea of large organisations having their own channel is a good practical application for us, because we don’t have any real limitations on channels.

We’ve done some interactive TV advertising with Nike and Hangland Bank, the ones more like customer response type, just press the button if you are interested. This type of iTV advertising is in the early stages because I think the creative people in the advertising agencies don’t fully understand what the capabilities are of interactivity, and how far they can take it. I think as they get more and more into it and understand what can be done, we’ll become more and more creative.

In terms of marketing to your existing subscriber base or to new subscribers, what has been the areas that have worked, e.g. what advice would you give to other IPTV operators?

First of all, our card is a good entry strategy against a cable TV operated bundle service, but it does bring with it a certain amount of inertia. Customers are slow to subscribe to channels when they have a free choice. I think we demonstrated that when we introduced a high volume discounted value mini pack, so you could take ten channels instead, on a twelve month basis and you get a discounted price across all of those channels. Using our call centre was a big step forward. It moved our outgoings up from about $65 last march to about $110 now.

What would you recommend in terms of acquiring a new custom base. Is there any type of particular media that has worked well or is it the usual types of marketing strategy?

I’d say that without a shadow of doubt the bulk of our success has come from our call centres, and up-selling the existing client base. So the first thing they do is ring up the existing installed broadband customers, and ask them if they would care to sign up for twelve months on a twelve month commitment. We’ll give you the set-up box and twelve or thirteen free channels and then on our card basis you can pick a premium channel that you want to watch. That got our subscriber base up very quickly. Then we had the inertia problem, so using the same call centre, hit them again, say you’ve signed up for three channels and paying sixty Hong Kong dollars, and did you know that for 130 dollars you can have ten channels of your choice. So that has been a real boost.

As the IPTV subscriber base grows many people are saying the IPTV box will form a residential gateway to providing other additional services linking up other devices in the home and providing home networking. Is that on the horizon?

Yes it’s definitely on the horizon, and it will be the next frontier for us as an operator, how you manage and provide for home networks. We cover this on three major points.

First, I think is the fact that we need in the home to get from the modem to the set up box. Secondly ,customers will want to put lots of different devices around the home and Wi-Fi is a good home networking strategy to get from the set-up box to the modem and also to connect other devices in the home. That brings certain problems for the customer because as we all know there is opportunity for our operation to play a major role in setting up home networks. Thirdly, if the customer wants to get access to the home to let the cat out or check the fridge, or any of these sorts of things, then they can do any of these things.

Then if they can get into the home so can anyone else. The telco is the last frontier into the house with the home gateway and can play a major role in protecting the customer’s content just the same as we protect the content provider that we use for the TV.

And that’s one of the key areas of IPTV isn’t it? Building a trust with the content provider so that the content will be secure. Are you having these discussions about home networks and how content might be deployed around multiple devices and how that might be protected?

No, not yet, I think we put that under the general category of future standards. Our set top boxes are based on a DVD player because we believe that in the future the set-up box will become an integral part of the home environment within a home entertainment system, or home media server. As far as we’re concerned we’ll wait for those standards and then we’ll migrate to them when they happen.

How do you see the PCCW IPTV service developing in the future?

We’ve got high definition for the end of the year, which is one major development for us. We have further interactivity and interactive advertising. The TV set becoming the transactional device in the home, or another convenient transactional device in the home. And then how we progress, I think one of the challenges is how we progress into unicast type on-demand services.

We’ve launched an on-demand adult content service at the moment and we’ll extend that to family entertainment shortly. It’s a very easy step apart from getting the right licensing agreement from some of the content providers of to go to network based PVR. Those are all quite predictable services but beyond that when you go in to time shifting and replay facilities, those could have a major impact on the core IP network, the unicast network. We have to be very cautious as we introduce or migrate from a purely multicast scenario into some more demanding and unicast scenarios that we don’t make them too cheap or too popular, that they are ahead of their time, so they end up squeezing the IP core network.

For more information about PCCW please visit http://www.pccw.com.