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Market Opportunities for IP TV Video Offerings

The latest market study from IMS Research reveals that demand for connected consumer electronics (CE) devices are being driven by increased availability of broadband services, the evolution of content delivery methods and the convergence of the Technology, Media and Telecommunications industries.

According to their assessment of the marketplace, these market drivers are resulting in new retail delivery models, new sources of video content and evident changes in consumer behavior. Given their current view, it appears that the European market is leading, and the North America market is trailing by comparison.

They believe that adoption of over-the-top (OTT) content will become an "extension" of both pay-TV and stand-alone device subscription packages -- but OTT on the TV will not become a "ubiquitous solution" until at least 2015.

Apparently, IMS Research doesn't anticipate that the major CE manufacturers will move quickly to grasp the nascent OTT IP TV video market opportunity. It makes me wonder, which companies did they interview in their study. Did they discount the related big CE vendor announcements at CES in January?

They say, many companies are making the OTT connection. Accedo Broadband is an example of a vendor that offers interactive and long tail VOD content for both IPTV services and connected television sets. Broadband service providers such as BT, PCCW, CHT, and OTE are all examples of tier-one telcos that are experimenting with offerings.

According to IMS, pay-TV operators garnered 57 percent of global TV households at the end of 2009. Regardless, they are changing their strategies, given the changing consumer viewing habits. Therefore, operators intend to future-proof their set-top boxes (STBs) with internet connectivity to enable future IP video streaming services.

The IMS analysis reveals that nearly 13 percent of global IP set-top box (STB) shipments in 2008 were operator-deployed "hybrid" (broadcast and broadband) boxes -- with the ability to receive content via IP or digital terrestrial broadcasts.

Of these 1.6 million hybrid STBs deployed, 87 percent were shipped to Western European TV households. Uptake of operator-deployed IP+DTT STBs has been popular in both the UK and France, but it is anticipated that Italy, Germany, Spain and the Netherlands will see an increase through 2014.

IP Vision, Fetch TV, Netgem and Video Futur are a few examples of direct-to-consumer IP TV video business models and associated services available in Western Europe. The hybrid boxes supply à la carte VOD offerings, DVR functionality and digital multichannel TV capabilities -- utilizing free-to-air (FTA) DTT broadcast channels.

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