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January 14, 2009

IPTV (Telco TV) Tops Pay-TV Platform Growth at 32 Percent

By Richard Grigonis, Executive Editor, IP Communications Group

It’s said that Thomas Edison, who first recorded sound and contributed to the development of telegraphy, telephony and motion pictures, staunchly refused to conduct any experiments involving television, explaining that if the technology were ever perfected, it would harm the public by being “a big time-waster.”
As things turned out, TV was perfected – and it was something of a time-waster. The major TV networks held audiences captive as they dispensed one-way entertainment and news, broadcasting a few channels to the masses. This near-monopoly was upset in the late 1970s and early 1980s, as cable television began to demolish the network hegemonies that had lasted since the late 1940s.
As cable companies began to encroach on the world of the telcos by offering “digital voice” service (another name for VoIP), the telcos responded by developing their own form of IPTV (News - Alert), highly interactive with many features that can’t be found in conventional cable TV systems – although much interactive-related IPTV innovation has been occurring in the cable TV world too, perhaps more than in the telco world.
Recently, in its latest quarterly update to its study, “Pay-TV Subscriptions,” (which profiles global pay-TV subscription data), ABI Research (News - Alert) has reported that interactive bi-directional television is increasing at the expense of legacy formats. New pay-TV market data indicates that IPTV will grow by an estimated 32 percent annually over the next six years to nearly 79 million subscribers globally by the end of 2014.
Conventional satellite and cable TV have served as the foundation for pay-TV platforms for many years now, and they are likely to retain their footholds in those markets for some time. However, their growth rates will slow as IPTV gains traction.
ABI Research Industry Analyst Serene Fong observes that, “Some telecom operators which are faced with thinning margins are deploying high-speed access networking technologies to challenge incumbent satellite and cable operators.” They do so by offering compelling alternatives via existing broadband infrastructure, thereby making service subscription easier and more convenient compared to the traditionally more cumbersome and costlier legacy television alternatives.
IPTV usage will increase high speed broadband connection prices fall and more users start adopting multimedia services. According to Fong, “Usage will initially be concentrated in countries with established high speed Internet technologies such as France, the Netherlands, South Korea and Hong Kong. But as technology progresses and matures, developing countries such as China will rapidly catch up in subscription numbers.”
Operators will continue rolling out IPTV as part of their multi-play strategies, and the right set of technology deployment and consumer-friendly price plans will become increasingly vital. However, Fong cautions that, “While we expect to see greater momentum in the telco TV segment in the years to come, this new television alternative is unlikely to completely replace legacy pay television services immediately.”
ABI’s the study forms part of the company’s Home Networking Research Service.
Don’t forget to check out TMCnet’s White Paper Library, which provides a selection of in-depth information on relevant topics affecting the IP Communications industry. The library offers white papers, case studies and other documents which are free to registered users. Today’s featured white paper is Fixed Service Strategies for Mobile Network Operators, brought to you by Comverse (News - Alert).

Richard Grigonis is Executive Editor of TMC (News - Alert)�s IP Communications Group. To read more of Richard�s articles, please visit his columnist page.

Edited by Michelle Robart

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