Broadband TV subscribers to reach 25.3 mn in 2008

MUMBAI: According to a new study from Research and Markets, the number of subscribers receiving broadband-delivered TV services will rise from 1.9 million in 2004 to 25.3 million in 2008.

Subscription revenues are projected to soar from $635 million last year to $7.2 billion in 2008. The IPTV Global Forecast: 2005-2008 report looks at the developments in IPTV platforms worldwide, including plans by SBC and BellSouth to deploy large IP TV networks in the U.S., and Verizon's strategy to use IP TV technology to deliver VOD over its FTTP access network. In addition, China Telecom is looking to introducing broadband-delivered VOD, and continued growth is expected for PCCW's Now Broadband TV in Hong Kong and FastWeb in Italy.

Meanwhile Kagan Research has released a study on the economics of High Definition (HD) cable networks in the US. Kagan notes that several early HD TV cable network entrants are banking on the burgeoning growth potential of the HD market. In spite of the current limitations on bandwidth, programmers are ready to capitalize on what could be an explosive area of growth.

A few networks already offer a full array of HD programming completely distinct from what�s available on either cable's or satellite's current channel lineups, while others are delivering merely a HD feed of their current standard def lineup. Whether cable networks focus on an HD simulcast or a channel with new content, all programmers must eventually move viewers from analogue based programming to digital.

The report notes that in the US currently over 20 non-broadcast networks are offering HD programming on a daily basis, up from just six in the years between 1998 and 2003. 2005 has already seen the launch of another HD network: ESPN2 HD - a simulcast of ESPN2 - launched its service on 6 January. Going forward into 2005, plans are under way for launching nine additional HD networks.

The eight networks classified as pure HD services, are expected to grow revenues at a CAGR of 88 per cent over the next five years and produce total revenues of $943 million. The bulk of the revenue in 2009, Kagan estimates, will come from ESPN HD with HDNet and Discovery HD taking second and third, respectively.

On the expense side, Kagan estimates that by 2009, total expenses for the pure HD networks will be $627 mil. or $5.26 per subscriber. The 2009 per sub figure will be 68 per cent lower than the 2005 figure of $16.43. Through 2009, Kagan expects total expenses to increase at a CAGR of 42 per cent; while expense per sub should decrease at a CAGR of 25 per cent.

With over 16 million digital sets shipped to retailers since 1998, more than 12 million of which are HDTVs, movement to advanced compression technologies such as MPEG-4 and VC-1 under way and HD awareness among consumers at record levels, the vision of an all-digital/HD country is taking hold.

Some key factors on the side of HDTV cable network growth:

- More than 12 million HDTV sets have been sold to U.S. consumers; bringing penetration of HD sets into TV households to 10 per cent

- On the broadcast side, 1,373 stations are now broadcasting in digital in 211 markets serving 99.98 per centof TV homes.

- DBS operators garnered 672,000 HD tier subscribers in 2004. This is expected to reach 11.5 million. by 2009.

- Network migrations to high-definition feeds are prompted by the limited amount of bandwidth available on cable systems and satellite transponders.

- MPEG-2 remains the dominant codec in the market. However a migration to MPEG-4 and/or VC-1 is just around the corner.

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