IPTV is clearly an essential element for the long-term survival of a wide array of telecom industry participants, but the move to deploy IPTV as a mass-market service will benefit some market sectors at the expense of others, according to a new report released by the subscription research service "Light Reading Insider."
Network operators �- the companies that will drive the IPTV business with their capital expenditures �- will face the biggest challenge in realizing profits from IPTV, notes James Crawshaw, Contributing Analyst for Light Reading Insider and author of the report. "While the ARPU uplift promised by IPTV appears attractive, IPTV is likely to be a relatively low gross margin business for most telcos and will detract from operating profits in the medium term, until economies of scale are reached," he explains. Crawshaw cites the cost of acquiring content as the key factor that will drag down the profitability of IPTV for network operators.
Other key findings of the report include:
* Content owners and technology suppliers have the best chance of emerging as big winners as a result of widespread IPTV deployment.
* Several major vendors have already established themselves as dominant forces in the IPTV technology race.
* Network operators worldwide will spend $21 billion on IPTV-enabling technologies by 2010, attracting 65 million IPTV subscribers by that year.
* Disintermediation is a big risk factor for network operators, as content owners will establish themselves as first-source providers via their own broadband portals.
Network operators �- the companies that will drive the IPTV business with their capital expenditures �- will face the biggest challenge in realizing profits from IPTV, notes James Crawshaw, Contributing Analyst for Light Reading Insider and author of the report. "While the ARPU uplift promised by IPTV appears attractive, IPTV is likely to be a relatively low gross margin business for most telcos and will detract from operating profits in the medium term, until economies of scale are reached," he explains. Crawshaw cites the cost of acquiring content as the key factor that will drag down the profitability of IPTV for network operators.
Other key findings of the report include:
* Content owners and technology suppliers have the best chance of emerging as big winners as a result of widespread IPTV deployment.
* Several major vendors have already established themselves as dominant forces in the IPTV technology race.
* Network operators worldwide will spend $21 billion on IPTV-enabling technologies by 2010, attracting 65 million IPTV subscribers by that year.
* Disintermediation is a big risk factor for network operators, as content owners will establish themselves as first-source providers via their own broadband portals.