Deutsche Telekom bucks the trend with paid multi-screen

Deutsche Telekom is bucking the industry trend with its decision to charge its IPTV customers to access the multi-screen TV service that will launch later this year. The company’s consumer research indicates a willingness to pay and according to Dr Randolph Nikutta, Leader Interactive High End Media Innovation & Development at Deutsche Telekom Laboratories, “It is worthwhile starting a multi-screen extension as a paid service. If you start by offering it free it will be difficult to charge later. When people consume a premium TV product and you provide an extension of that product you have to pay a little extra. And as an operator we need some way to recover at least part of what we are spending on distribution to the additional platforms.”

Nikutta was speaking on a recent Videonet round-table addressing the next steps in multi-screen TV. During the course of the webcast the audience was asked if they think it is possible to move consumers away from free multi-screen TV (bundled with a Pay TV subscription) once they have become used to not paying any discrete additional fees. Over 63% thought you can introduce charges once people have grown used to using the service while over 36% believe that once expectations for ‘free’ have been set, the business model cannot be changed.

Although the German telco and IPTV provider is not revealing its pricing yet, the figures suggested to consumers in its research were not considered a barrier to adoption. Nikutta said that the Deutsche Telekom customers who were asked consider the forthcoming multi-screen service a very welcome and valuable extension of the existing IPTV offer. Not surprisingly, this is especially the case for early adopters and more tech-minded consumers, who are especially keen to the get content onto their tablets.

At launch the Deutsche Telekom multi-screen offer will be focused on the home. “This is the most important environment today. We have to provide the flexibility for most family members to consume our product on every device in every room. We want to enable multi-room consumption and make it easier than installing a second set-top box,” Nikutta reveals.

One likely use case for the new Deutsche Telekom service is to resolve screen conflicts – enabling people to watch different things at the same time. “Our philosophy is to start with a one-to-one copy of the existing product but on different screens, so that means providing the same experience in terms of navigation and usability on tablets or mobiles,” Nikutta says. “We want people to adapt easily to the new screens without learning lots of new things.”

This is stage one of the service deployment. Once customers are accustomed to using the multi-screen service Deutsche Telekom will look to introduce interactive and companion screen features, which Nikutta believes open the way to new service and business opportunities

Deutsche Telekom will make network PVR part of the multi-screen experience as well, working on the basis that if you want to replicate the IPTV service across different screens, customers will need access to personally recorded content via those new devices. “Network PVR will be a necessity,” says Nikutta. He acknowledges that this will increase bandwidth demands on the network, because where someone might previously have recorded a programme on their PVR hard disk and watched it on the TV, in future they will have the option to watch a PVR recording on the tablet instead, drawing a unicast stream down from the network.

For the full V-Net article click here.