Despite fears of cord-cutting and cord-shaving, the worldwide pay-TV market grew at a steady pace in 2012, generating $238 billion by the end of the year. That was mostly courtesy of IPTV, which as a market segment offset contractions in satellite and cable.

By way of comparison, the market in 2011 was worth $223 billion, according to ABI Research`s "Pay-TV ARPU and Revenues" Market Data. Going forward, TV operators stand to keep up the expansion: ABI estimates revenue of $304 billion in 2018, with a small yet steady CAGR of 4 percent.

Globally, IPTV is gaining market share year-over-year while the rest of the pay-TV platforms are slowly contracting, ABI found. IPTV service revenue market share increased from 10 percent in 2011 to 11.5 percent in 2012. Cable TV market share in contrast dropped to 47 percent in 2012, down from 48.5 percent in 2011. As for satellite TV, market share dropped around 1 percent last year.

"Availability of super-fast broadband networks and bundle offers from telcos over high-speed networks are driving the growth of IPTV adoption. IPTV market share is expected to increase to 18 percent in 2018, to generate $53 billion in revenue," according to Jake Saunders, vice president and practice director of core forecasting.

North America is seeing IPTV success play out, mostly thanks to fiber availability. Verizon (News - Alert) Communications for instance saw 34,000 FiOS TV customers added during the fourth quarter of 2012. In all, Verizon had 4.7 million FiOS video connections at the end of the quarter, and a total of 5.4 million FiOS (News - Alert) Internet customers.

AT&T reported that it added 192,000 IPTV subscribers in Q4 2012 to its U-verse service, bringing the total to 4.5 million U-verse IPTV subscribers. Canadian telco Bell Aliant (News - Alert) meanwhile added 17,400 new IPTV customers in the fourth quarter of 2012. The additions bring the carrier's totals to 123,000 IPTV customers by the end of December.

“In the global IPTV sector, Verizon is the top ranked IPTV operator with the highest service revenue," said Khin Sandi Lynn, research analyst at ABI.

But in Verizon’s case, the gain of 34,000 is a slowdown compared to the 194,000 gained in the quarter one year ago. The slowing in growth is partially related to the company's freezing of the FiOS fiber expansion. However, a company strategy is to migrate DSL lines as they become compromised; it plans to move 300,000 DSL lines to fiber in 2013, after moving 223,000 homes off copper in 2012.

Unlike fellow IPTV provider Verizon Communications, AT&T is planning to continue to expand its fiber build to pass more homes with U-verse. As of Q4 2012, TV penetration stood at 18.7 percent at the end of the fourth quarter, but plans to have U-verse pass 75 percent of its wireline base—the timeline is undisclosed.

Bell Aliant also reiterated its commitment to growing its FTTH network, and said it will continue the fiber build-out with a plan to pass about 800,000 premises by year-end to deliver FibreOP TV and broadband.

"Our focus has been on expanding our fibre-to-the-home (FTTH) coverage to provide our leading edge FibreOP Internet and TV service to our customers, and we are seeing benefits," said Karen Sheriff, Bell Aliant's president-CEO, in a statement. "Our FibreOP services are now available to over 650,000 premises in our territories, with over 110,000 customers now subscribing."

Despite IPTV growth, the incumbents still dominate. Based on ABI Research`s global pay-TV market share analysis, satellite giant DirecTV (News - Alert) ranks top in terms of pay-TV service revenue across all platforms. DirecTV gained 100,000 net subscribers in the fourth quarter it announced ahead of its earnings report scheduled for this month. That’s a slowdown compared to the 125,000 net new subscribers it added in the fourth quarter of 2011, but CEO Mike White said at a Citi conference that the growth was “significantly above where we thought we would be.”

Service revenue contributions meanwhile from cable TV are proving mixed. The Asia-Pacific region saw service revenue growth due to underlying increase in subscriptions. However, cable TV operators in North America are experiencing a decline in service revenue as result of a contracting subscriber base, despite cable TV innovations such as DVR and HDTV. So far, Time Warner (News - Alert) Cable has reported for Q4 2012, losing 129,000 video subscribers, which is flat year-on-year but a slight improvement over Q3, when it lost 140,000 net video subscribers.