Free PC TV to hit Canadian universities this year

One of Canada's high tech pioneers is moving into the television distribution business. Terry Matthews, founder of Mitel Networks and March Networks, is expanding his latest venture - IPTV and VoIP - from the UK to university students in Canada.Inuk Networks Ltd. currently offers free IPTV and VoIP services to more than 100,000 university students in Britain. The London UK-based company recently opened its Canadian headquarters in Kanata ON and is in technical trials with the University of Waterloo to deliver free TV over PCs to students, and a captive audience to advertisers. "We know who's watching, and the value of the viewer is becoming more apparent to advertisers," says Shaun Illingworth, Inuk's VP of business development. Instead of the scattershot broadcast approach that displays Wal-Mart ads to all viewers of the six o'clock news, advertisers can deliver more targeted ads for Nike to the student demographic. "We're in trials with networks and advertisers in the UK to figure out what kinds of ads they're willing to pay for. Big brands are looking ways to capture the buyers of tomorrow," he adds.Inuk's business model capitalizes on a number of emerging trends in addition to focused advertising. As in Canada and the US, the UK is making the transition from analog to digital television transmission, Illingworth explains. "We're able to grab those analog signals, convert them to IP and make them available on students' PCs in partnership with the universities' research networks." And unlike other typical IPTV offerings, Inuk's service doesn't require hardware such as a set-top box. Illingworth points out there are some significant shifts occurring in younger demographics. "In both Canada and the UK, students aren't bringing televisions with them to universities anymore," he says, estimating only about 20% of students in university residences have a TV. To avoid cable or satellite dish charges on traditional television, students are turning to computer-based forms such as YouTube, BiTorrent and Joost for entertainment. "We identified an unmet need in the student market, and they're willing to work out the bugs in the system with us," Illingworth adds.Carmi Levy, senior VP at Toronto-based AR Communications, concurs that the PC is increasingly becoming the single entertainment and communications device for this price-sensitive, yet tech-savvy segment. "In the long term, this will happen in the mass market, but in the short term, it's a niche university market," he says.Levy believes that Even as a niche model Inuk can build a sustainable business based on "free economics." He notes that the PeoplePC initiative, an advertising-based business model which offers a free computer every three years bundled with its low monthly dial-up ISP fee, started up in 1999 and later acquired by Earthlink survives to this day. "People are willing to provide personal information in exchange for reduced costs," says Levy. By requiring consumers to register for free services, providers can collect data on viewing preferences and purchase histories that can be used to develop finely-tuned advertising and content for specific audiences - an option that has not been available in the past in broadcast-based media such as television. There is also another trend at play, says Bill St. Arnaud, chief research officer at Ottawa-based Canarie Inc. "All that content that was on cable TV is now moving to the Internet. ABC, for example, now delivers all its shows on the Web. Providers can get a bigger market and more revenue by offering their content free on the Web, and then get a direct measure of who's watching their programming."These trends will benefit content producers and distributors because they'll now have a greater capacity to deliver content the audience wants, adds Levy. "You can't create one ad for one vehicle anymore - providers will need a more precisely targeted set of ads for an equally targeted set of delivery vehicles. If you're a Canadian content producer, your job just got harder but there's also more opportunity."He points out there will also be more opportunities to circumvent many barriers in the system in the future. "Previously, there were only a few television channels to reach Canadian audiences. You either had to deal with a public broadcaster like the CBC or deal with a few monolithic private broadcasters like Shaw and CanWest. Smaller players can now develop content with lower budgets and still reach the same audience, without going through the hoops of large channel owners. "Inuk Networks is owned by Wesley Clover, an investment company founded by Terry Matthews. Its technology portfolio companies include BreconRidge Manufacturing Solutions, Bridgewater Systems, Raseen Software, DragonWave, Encore Networks, Enfis Ltd, Fractal Edge Limited, March Networks, Mitel Networks, MKC Networks, Natural Convergence, NewHeights Software, Newport Networks, Solace Systems, and Ubiquity Software.

Free PC TV to hit Canadian universities this year

Broadcast | January 2, 2008

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