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Differences in IPTV Market Environments

According to the Multimedia Research Group, there are two general market environments for IPTV services. The first is the North American environment where about 90 percent of all homes are already served by cable or satellite.

This also is the case in parts of Europe that include the Benelux countries, Scandinavia, and Austria. A few countries in Asia such as Korea also fall into this class. The service providers in this type of market are using IPTV services to defend themselves against strong cable competition.

They are trying to increase their broadband market share and reduce or eliminate their rate of loss of residential subscribers. Triple and quadruple play bundling strategies that include voice, data, TV, and possibly mobile will be important packaging and pricing strategies for this market.

The second market environment is one where the free, over-the-air, broadcast channels predominate and cable and satellite have a low level of penetration, say 30 percent or less. This is typical of most of the large European countries such as France, Italy, and Spain. In Asia, both Hong Kong and Japan fall into this category.

The UK falls between these classes and will be treated as part of the second, because the majority of homes are without cable or satellite. This market provides opportunities for the service providers to develop the video market. While the level of competition in these markets is low, user resistance to spending for TV services is high. The problem for the service providers is to overcome this resistance.

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