Television

IPTV subscriber base set for explosive growth: iSuppli

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MUMBAI: The worldwide subscriber base for Internet Protocol Television (IPTV) services is expected to expand by a factor of more than 26 from 2005 to 2010, spurring a competitive battle between video providers both old and new, iSuppli Corp. predicts.

Global IPTV subscribers will grow to slightly more than 63 million in 2010, rising at a stunning Compound Annual Growth Rate (CAGR) of 92.1 per cent from 2.4 million in 2005, as presented in the figure below.

The IPTV subscriber base will generate more than $27 billion in overall IPTV services revenue in 2010. While video services will account for the largest portion of these dollars, value-added media services and IPTV operator advertising will combine to represent more than 14 per cent of IPTV services revenue in 2010. Furthermore, across all IPTV services, the corresponding content licensing revenue will reach $11 billion in 2010.

“The fight to capture the expanding base of IPTV subscribers will put telecom operators on a collision course with existing pay-TV market competitors and with a new class of broadband video portals as they roll-out progressively more sophisticated offerings,” said iSuppli vice president multimedia content and services Mark Kirstein.

iSuppli categorises market deployment of IPTV services in three phases. The current global IPTV market is early in its first phase: basic service deployment. The second phase will add an array of value-added and interactive services. Phase three will bring dramatic improvements in integration and interactivity.

Thus, in this pending battle for subscribers, providing a competitive video offering is merely the cost of entry for IPTV operators. Differentiation of IPTV services will be essential to bringing new capabilities to TV-based entertainment and attracting subscribers.

Areas of differentiation will include:

Interactivity, such as communication, community, voting, interactive advertising and television commerce (t-commerce).

Integration across multiple platforms, across voice and data services and across content types, i.e. video, voice, music, gaming, data services and user content.
Personalisation, including intelligent TV recommendations, individualised advertising and non-linear video programming, such as Video on Demand (VoD) and Digital Video Recording (DVR).

Value-added services, including on-demand gaming, music, media applications, home networking management, security and data.

Beyond the video service providers themselves, an array of companies will benefit from new opportunities arising from their roles as the “arms suppliers” for the battle over the next generation of television distribution. These companies include infrastructure gear manufacturers, set-top box makers, software vendors and semiconductor suppliers, iSuppli predicts.

On a geographic basis, the European market has taken the early lead in the global IPTV market, both for subscribers and for revenue. However, Asia will generate faster growth than the other regions and will achieve the largest subscriber base by the end of this year. The Americas region will lead the world in terms of IPTV dollars starting this year because it will yield the highest Average Revenue Per User (ARPU).

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