ZillionTV = ZERO $$$ Launch of "richest creamiest" video delayed.

Launch Delayed:  The long awaited launch of ZillionTV has hit a snag.  The latest “hope” is to get something launched “in the second half of next year” according to this weeks press quotes attributed to their CEO, Mitch Burman.  Unfortunately in the ever crowded space of IPTV VOD services, hope is not a very useful business strategy.

Tier 1 Telcos Have Existing VOD Plans in Place:  Convincing a major Telco (Verizon or AT&T) to scrap their existing IPTV VOD service because you can give their customers “the richest, creamiest” video is laughable.  MSOs don’t care about the cream, they want the milk.  And they already have plenty of cows (movies and TV shows) from lots of farms (studios) providing lots of milk and butter for their major markets.

An Idea Whose Time Has Come and Gone (Along with the VC Cash):  Anyone who has worked with a major MSO or Telco knows that they are loath to make a decision, any decision which may tend to impact their service to their customer base.  Subscriber churn and calls for service are the bane of this business.  So there are lots and lots of roadblocks thrown up to prevent some crackpot from throwing a spanner in the works.  You need to get the CTO to agree it fits within their existing and planned network architecture.  Then you need to show the business owners how they will make tons of money with no service interruptions to their existing suckers – I mean, subscribers.

Net Neutrality Issues:  If Zillion’s point of difference in the market is to work together with ISPs to provide priority packets for better QoS, they may also have to convince the FCC that this is a great idea for American consumers.  The confirmation this past June of Julius Genachowski as FCC chairman was applauded by proponents of net neutrality, who hope the FCC will move decisively to limit what telecoms can and cannot do with internet traffic on their networks.  This could curdle Zillion’s cream.

Potential for Tier 3 Telcos.  If Zillion were to market their content licenses and set top boxes as a “me too” VOD service to smaller telcos, they may have a shot.  It may not be sexy but it could throw some water on the burn rate of their VC cash.  It could also buy them time to build a good size trial market to test their “customer selected advertising” business model.  But then again, there are easier IPTV movie rental choices for Tier 3 customers to make:  Hulu, Netflix, Boxee, Amazon Unbox, etc.  But, these services bypass the ISP altogether and go directly to the consumer.  Hummm…I wonder if you can resell ‘never used’ content distribution licenses on EBay? 

Keep pushing forward.

Jeff Vinson

jeff_vinson@sbcglobal.net

[Please contact Jeff directly to discuss any full time or consulting business propositions.]