Though Internet Protocol TV has been a buzzword for the past few years, the growth of the technology has been hampered by several factors, according to a study by Infonetics Research titled “Service Provider Plans for IPTV
and Video”.
Competition from cable multi-service operators, profitability of video services, and the cost of video content were identified as the three main business challenges North America, Asia-Pacific, and European service providers face in trying to grow the IPTV (News - Alert) market, the study found.
The percent of service provider revenue derived from IPTV and video, very small now, is slated to grow substantially over the next 2 years as the number of subscribers increases, said the study. In addition, IPTV providers now entering the market will likely have low introductory pricing to lure subscribers away from their cable and satellite competitors.
Only when IPTV operators can add incremental services, such as video on demand (VOD), online gaming, exclusive content, etc., will they be able to generate significant ARPU (average revenue per user), the study found.
“IPTV operators definitely know what they’re up against, in terms of the competitive business environment, regulatory challenges, and technical hurdles to making their IPTV businesses successful. However, our results show they are focusing on technologies that enhance subscriber QoE for today’s IPTV services, and are demanding clear product and service roadmaps from their chosen vendors to help them differentiate their services,” said Jeff Heynen, directing analyst at Infonetics Research, in a statement.
Other study findings:
--Service provider respondents plan to spend 28% of their 2007 capex budgets on IPTV and video equipment, software, and services.
--More functionality is top reason service providers would consider changing or adding new IPTV and video product vendors
--The percent of service providers offering subscription VOD service will grow from 58% now to 84% in 2008
--The most commonly offered interactive TV services in 2008 are home media (viewing and sharing of pictures and video), electronic program guide (EPG), and live weather/traffic
Infonetics’ study examines the trends, drivers, barriers, strategies, and implementation plans of North American, European, and Asia Pacific services providers offering IPTV and video services, and includes their product expenditures, preferred manufacturers and products, services offered, and technology choices.
Sample data at from the study can be downloaded here
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Spencer Chin is a contributing editor for TMCnet. To see more of his articles, please visit his columnist page.
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Internet Protocol (IP) | X |
| IP stands for Internet Protocol, a data-networking protocol developed throughout the 1980s. It is the established standard protocol for transmitting and receiving data
in packets over the Internet. I...more |
Internet Protocol Television (IPTV) | X |
| IPTV delivers a digital television service to subscribers
via the Internet Protocol over a broadband connection....more |
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