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IPTV and Switched Digital Video Slowdown

The Internet protocol television (IPTV) and switched digital video (SDV) equipment market increased 6 percent sequentially in 3Q08 to $1.4 billion, according to a market study by Infonetics Research.

In its latest report, Infonetics lowered its long-term IPTV and SDV forecast due to an expected slowdown in IPTV subscriber growth and a decrease in cable operators moving to switched digital video.

Annual overall growth will continue in the worldwide market through the downturn, but will grow in double-digit percentages rather than high triple-digit percentages, as it has in previous years.

"We still see growth coming from the telco IPTV sector because IPTV is one of the key ways telcos can hold on to their broadband subscribers and increase revenue per user, so providers will continue to roll out new networks or expand their existing networks," said Jeff Heynen, directing analyst for broadband and video at Infonetics Research.

Meanwhile, the cable switched digital video segment took a hit in the third quarter when Comcast slowed its SDV rollout and shifted its capex focus to DOCSIS 3.0 rollouts.

Still, cable MSOs will continue to introduce switched video capabilities into their digital TV networks, just at a slower pace than expected prior to the economic downturn -- which is forcing most families to rethink their entertainment budgets.

Highlights from the Infonetics study include:

- In 3Q08, IP set-top boxes (STBs) account for 70 percent of the total IPTV and SDV equipment revenue.

- IPTV middleware (content delivery platform) sales are up 21 percent in 3Q08, and video content protection software sales are up 14 percent.

- The competitive operator Iliad Group of France leads globally in the number of IPTV subscribers, with 3 million in 3Q08.

- North America is the leading region for total IPTV and SDV revenue, but Europe's developed economy keeps it in a close 2nd place.

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