At four communities managed by Milestone Management, a Dallas-based third-party manager, it was time for a change. TV programming at the 20-plus-year-old properties had been piped in by the regional cable provider for years, but residents were beginning to seek out more options. For Milestone’s executives, one sign that told them they needed to examine alternate programming was the myriad of pan-sized satellite TV dishes that began popping up on balconies and windowsills at the communities. “We knew right then that our residents wanted something different,” says Steve Lamberti, president at Milestone, which oversees 27,594 units throughout the South. “If you don’t give it to them, they’ll go to someone else.”
To make sure their residents stayed put, Milestone began researching IPTV, an emerging technology for delivering video and other services to residents. Short for Internet protocol television, IPTV has been popular in Europe and Asia for many years. Now, with heavyweights such as AT&T, Verizon, and DirecTV rolling out their own IPTV offerings, observers say IPTV is coming to America and that multifamily players will need to offer it to residents as an amenity play.
Indeed, incumbent providers have already begun to speak in multifamily terminology, rolling out a full-court press for the multi-dwelling unit market. In 2008, AT&T already had 126,000 IPTV customers signed up for its U-Verse TV product, while Verizon said its FiOS TV base included more than 700,000 subscribers.
Observers say there are compelling aspects to IPTV that set it apart when it comes to programming, entertainment, and application offerings. For instance, IPTV is sure to enable a wide range of applications, from tuning into the lobby security cameras and seeing who’s buzzing your apartment, to ordering a pizza from the corner delivery place. In the future, experts envision automating rent payments via the TV.
Milestone’s four communities are on board with the technology. In partnership with AT&T, Milestone rolled out U-Verse TV across its 1,000 units. And contrary to many other emerging technologies, rewiring the buildings wasn’t necessary—the service can run over existing, twisted-pair telephone lines.
Milestone’s leadership couldn’t be happier with the initial results. “We’ve had nothing but a really high level of enthusiasm from our property managers, who love calling current and potential residents and telling them about this innovative product that we’re offering,” Lamberti says. “We’ve found that our younger residents have really been ready to embrace this new technology.”
Stand and Deliver
Observers say a key distinction to IPTV is that, while it uses the same processes (aka protocols) that enable content to be served over the Web, the current systems are almost universally closed. What that means is that residents have true on-demand capabilities: Content and programming can be served up on a one-channel-at-a-time basis, in contrast to typical cable configurations, which send an entire bundle of channels to a set-top box. The distinction is especially important for high-definition programming because the ability to send one channel at a time means IPTV can have lower bandwidth requirements than other technologies.
“With IPTV, the only video that’s going into the house is the video signal that’s actually requested,” says Lew Scharfberg, a technology consultant who has helped Princeton, N.J.-based SES-Americom.
“The reason you can only get 20 HD channels over your typical cable system right now is because those systems bundle everything together, and they don’t have enough bandwidth to deliver anything else,” Scharfberg says. “IPTV actually helps with the amount of bandwidth you need entering into each unit.” Observers say AT&T is the only major carrier offering such a single-serve IPTV solution.
Experts say to-the-building bandwidth requirements range from about 13 Mb per second to 19 Mb per second. With AT&T and Verizon laying their own fiber pipes to properties or at least community nodes, those speeds are achievable today. And, as with Milestone’s rollout, the last several hundred feet of IPTV can be delivered via existing CAT-3 or CAT-5 wiring.
“In theory, yes, they can run it over CAT-3, but it depends on the condition of that existing wiring,” says Henry Pye, vice president of the Resident Technology Solutions division at RealPage and a former tech exec at JPI Cos., an Irving, Texas-based multifamily firm that has deployed Verizon’s FiOS TV offerings.
From a business standpoint, 2007 FCC rulings banning exclusive agreements between apartment owners and cable TV providers may have come just at the time when IPTV is starting to get a toehold in the U.S.
As a matter of policy in new construction, Pye says JPI always laid at least two types of cabling into its properties, so that its residents have a choice between at least two “triple-play” providers, such as telecom and cable firms that are all offering Internet, phone, and TV packages on their respective networks. Typically, the infrastructure investment cost JPI between $1,200 and $1,350 per unit, but Pye says it was a price worth paying.
This article was first published in Multifamily Executive in January 2008.
Tune In, Turn On
Here’s how to capitalize on the IPTV trend.
1. Prepare for demand. IPTV is coming to America. Already popular in Europe and Asia, analysts estimate IPTV subscribers in the United States to top 7 million by 2011.
2. Market to a younger demographic. Tech-savvy Gen Y renters enjoy IP-enabled options, and IPTV can help communities keep up in the amenities game.
3. Invest in infrastructure. IPTV can be delivered over existing phone lines, but make sure that wiring is in good shape. Fiber-to-the-node rollouts should provide enough bandwidth outside your properties.