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March 21, 2012
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Belgacom sacrificed pay VOD on iPad to avoid 30% fees

Belgacom decided against enabling VOD purchases within the Apple iPad app on its TV Partout multi-screen service because the demand by Apple for a 30% revenue share on in-app purchases was simply too high. Instead, the Belgian IPTV provider bought the rights from studios to provide a selection of around 35 movies completely free as part of the service. Speaking at IP&TV World Forum in London this week, Geert Kelchtermans, Category Line Manager at Belgacom, noted: “Anyone who works in IPTV knows that 30% is a lot and it does not leave much in the bottom line.”

Kelchtermans declared that Apple’s business model for in-app purchases is stopping Belgacom from introducing the services it wants. He highlighted how the iPad is a great device for content discovery and provides the best way to browse content. But within TV Partout you cannot then complete the discovery process by purchasing the movie in the app, even if you then watch the movie somewhere else like on the PC or television, because the 30% fee is too restrictive.

Kelchtermans revealed that Belgacom did consider using browser-based solutions to bypass the Apple fee. And he warned: “In my opinion, if Apple does not change its position on the 30% rate, most of it [transactional content services via the iPad) will become browser-based.”

On a happier note, Kelchtermans says consumers have responded very enthusiastically to TV Partout, which offers 25 live channels plus on-demand content across the PC, Android and Apple iOS devices, covering in-home viewing and mobile consumption using the Belgacom 3G network. “The most popular feature on the service is remote programming of PVR,” he added.

Launched in 2011, TV Partout builds upon the OTT service the company already offered for TV and VOD to the PC. It added the Apple and Android devices and pulled all the OTT/multi-screen services under one brand. At the same time, the company integrated its different backends for television and online services so that there is now a shared Content Management System and common headend.

Kelchtermans says the main obstacle to the new service was rights negotiations and he advised anyone deploying a TV Everywhere offering to start this part of the process early. “Content is key; do not underestimate the content issues,” he warned.