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July 10, 2007

Study: IPTV Video Revenue to Hit $26 Billion by 2011

By Spencer D. Chin
TMCnet Web Editor
Telcos increasingly are looking to Internet Protocol Television (IPTV) offerings to augment their declining voice communications revenue, causing the market for IPTV (News - Alert) video services to rise by a factor of nearly 34 from 2006 to 2011, according to iSuppli Corp.


 
In a study titled, “IPTV Content & Services 2007: Telecom Companies Turn up the Heat,” iSuppli projects the market for IPTV video services to rise to $26.3 billion in 2011, up from $779.2 million in 2006. Telcos view IPTV as an opportunity to recapture the revenue generated by many of the Internet-based services that have bypassed them by traveling through their broadband pipes.
 
However, IPTV will deliver significantly more than just video services, offering access to digital music, on-demand gaming, data services, home security and other items. These value-added offerings will boost global IPTV video revenue stream by more than $1 billion by 2010, iSuppli predicted.
 
IPTV will have significant room for expansion beyond 2011.
 
“Subscriber and revenue growth in the IPTV market will be awesome,” said Frank Dickson, principal analyst with iSuppli. “However, to put things into perspective, Comcast (News - Alert) had 2006 pro-forma cable revenue of more than $26 billion. It is very likely that the entire worldwide IPTV industry in 2011 will not be as large as Comcast alone is.”
 
iSuppli noted that many IPTV deployment strategies are focused on next generation video services. Because of this, competition for services is likely to focus on features and benefits—rather than price. Those features include High-Definition (HD) programming, Digital Video Recording (DVR) service and remote access. Pay-Per-View (PPV) and Video on Demand (VoD) service will combine to generate nearly $300 million in revenue in 2007.
 
Advertising promises to be another significant revenue source to augment IPTV video.  iSuppli believes IPTV operators have an opportunity to deliver unique value to advertisers through behavioral targeting and interactivity.  This will drive IPTV-based advertising revenue to surpass $1 billion annually in 2010.
 
iSuppli projected that China will be the global leader in IPTV subscribers In 2011, due mainly to the country’s population and the government’s technology emphasis for the 2008 Olympics, However, the firm expects North America to account for the largest chunk of IPTV revenue—more than $10 billion – by 2011.
 
Spencer Chin is a contributing editor for TMCnet. To see more of his articles, please visit his columnist page.
 
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