TalkTalk and Alcatel-Lucent have signed a three year deal to use the Velocix 7810 range to create a Content Delivery Network. In plain English this means TalkTalk will be installing hardware into its LLU network that will allow them to deliver TV over IP at a sensible cost, and as the solution is embedded in the network, management of traffic volumes should allow the TV experience to be smooth and jitter-free unlike many users' experience of higher quality streamed content over the public internet.
Some will remember that HomeChoice was doing something similar way back in 2000 when ADSL was new to the UK, but the firm never reached a critical mass of users, and was then bought by Tiscali, who was in turn acquired by TalkTalk. It is possible that some of this core expertise will be re-used to roll out a TalkTalk TV product.
"By enabling our network with Alcatel-Lucent Velocix infrastructure, we will be able to lead the market in digital delivery, further showcasing TalkTalk's leading innovation in the UK market. Alcatel-Lucent Velocix's experience of operating a global CDN, coupled with its market leadership and extensive experience in video delivery were major factors in our selection. We believe Alcatel-Lucent is best positioned to support us in the deployment and operation of our own CDN."Max Alexander, TV & Media Director of TalkTalk
This news is closely related to the YouView project, a joint effort between the BBC, Channel 4, ITV, Arqiva, BT and TalkTalk. It is a race to become the Video on Demand (VoD) platform competing against Sky's Anytime Plus service, which while widely publicised has as yet not surfaced. The BT Vision product is already on the market, and while vastly more popular than the old HomeChoice service, it is still well behind Virgin Media and Sky in terms of numbers.
The firm that manages to produce a VoD product, with a decent library of films and TV box-sets at an affordable price (subscription or pay-per-view) stands a good chance of quickly establishing itself. The key to success is availability, price and quality. The near ubiquitous nature of Freeview means any service must exceed that in terms of picture quality. In terms of bit rates, HD channels on Sky can produce reasonable HD quality at 9 to 11Mbps.
TalkTalk may succeed as with some five million customers almost all on its LLU networks, it has a customer base ready to be targeted and in terms of UK coverage its LLU market covers 85% of households. The real issue is what quality/bit rate of video can it use to target its customers–Hopefully variable bit-rates will be supported, so those with fast lines can get HD quality, those further away getting lower quality at lower prices. What will be interesting is how this will impact on the DVD rental market which is trying to provide similar streaming services via the public Internet. We may well see some partnerships in this area.