Skip to main content

IPTV Threatened by Over-the-Top Video

Last year, subscribers to telco IPTV services worldwide numbered only about 13.5 million, but ABI Research now forecasts their ranks to grow to more than 90 million by the end of 2013. Is that a realistic projection, based upon current events that clearly disrupt the Pay-TV industry status quo? Only time will tell.

Given the rapid adoption of direct-to-consumer offerings from new online video services created by established entertainment industry players, such as Hulu that launched this week in the U.S. market, is the forward-looking profit potential for new entrants to the traditional Pay-TV services market now in question?

"The IPTV market as a whole is poised for strong growth," says senior analyst Cesar Bachelet, "but clearly it will be stronger in some areas than in others. ABI Research anticipates particularly substantial growth in North America and most emerging markets."

In North America, until recently only a few Canadian operators and smaller rural operators in the U.S. have offered IPTV services -- although 2007 saw Verizon and AT&T begin to achieve some scale in their fiber deployments. IPTV growth in the U.S. is closely linked to those large fiber rollouts -- and the assumption that the legacy Pay-TV market opportunity can be sustained.

Although IPTV got a head start in Asia when PCCW launched its successful IPTV service in Hong Kong, the region overall is very mixed regarding service adoption, due to regulatory issues and/or low broadband penetration in key markets. However, ABI Research forecasts vigorous growth ahead as these issues are gradually being resolved.

IPTV has been available in Western Europe since 1999, so the market there is comparatively well-developed already, especially in countries such as France. There is scope for growth, however, as several large markets -- such as Germany and the UK -- still have relatively low penetration rates.

IPTV markets open an opportunity for vendors of the much needed new infrastructure: video servers, middleware, set-top boxes and more. Another opportunity arises from the migration from MPEG-2 to MPEG-4 encoding (allowing HDTV) and the addition of new functionality to traditional linear programming services, which requires new equipment and middleware.

But that doesn't translate to automatic success for vendors, and still leaves many unanswered questions for telcos who make those leap-of-faith investments. "Operators are getting very picky when choosing their vendors," notes Bachelet. "They want one with a proven track record, a history of supporting large-scale deployments."

And that cuts two ways: "For telcos, the road to IPTV could still be rocky, because for most, video is a brand new and very sophisticated business, and they are up against incumbent Pay-TV operators who have established relationships and a great deal of experience."

Then again, perhaps it's the unpredictable threat from commercial over-the-top video offerings that's by far the most disturbing to anyone who is investing in new IPTV infrastructure.

Popular posts from this blog

Securing the Future of Cellular IoT Apps

The Internet of Things (IoT) continues to expand. According to the latest worldwide market study by Juniper Research, they forecast a 90 percent growth in cellular IoT devices by 2028, with the global number reaching 6.5 billion. This exponential rise presents both exciting opportunities and significant challenges. While the growth of cellular IoT unlocks a vast potential for innovation in smart cities, industrial automation, and remote monitoring, it also requires device management and security advancements. Cellular IoT Market Development Juniper's research highlights the critical role of intelligent infrastructure management solutions. These platforms will empower the users to automate critical tasks such as device configuration, real-time security management, and optimized wireless connectivity. The surge in cellular data usage, projected to reach 46 petabytes by 2028 compared to 21 petabytes today, further underscores the need for automation. This is where federated learning i