Technology | Media | Telecommunications

Friday, February 26, 2010

Hospitality TV Operators Embracing IPTV

Over 11 million hotel rooms and 1 million airline seats are potential new IPTV entertainment applications, according to the latest market study by MRG, Inc.

Hotels and Airlines alone will account for a $1.9 billion global market in 2012, indicating that for most hospitality applications, analog video use is likely to quickly become extinct.

MRG says that both In-Room Entertainment (IRE) and In-Flight Entertainment (IFE) markets show a sharp shift in user expectations.

"While respondents indicated that IPTV may be too expensive for the low-end market, the study finds that there is a substantial and growing need for IPTV to serve the mid- and high-end of the hospitality market. This has gone from a nice-to-have to a must-have situation," says Mike Galli, IPTV Analyst at MRG.

While many in the IPTV industry may consider the hospitality opportunity to be insignificant, MRG found that it is very important -- with some IPTV suppliers reporting that it now represents 25 percent of their total revenue.

There are specific opportunities in a variety of hospitality segments including hotels, dormitories, hospitals and aircraft, and this report helps to clearly identify where they are in each segment.

One key benefit of IPTV is superior remote operation and diagnosis -- meaning double- or triple-play systems can be monitored from off-site, resulting in huge OpEx savings for the Hospitality Operator.

For example, one hospital IPTV system frees nurses from explaining to patients how to use the system. Other examples show how hotels using both VOD systems and e-com are able to generate far more revenue from e-com and advertising than from Pay-per-View.

"Simplicity also is key to improving user enjoyment," states Mr. Galli. "Since guests are there for only a short period, they don't have time to learn a complex system, but want to get interactive services like those at home."

As consumers receive improved video services at home, Hospitality Operators are finding there is a need to upgrade hospitality systems, much of it resulting from HD and VOD improvements in 2008-2009.