IPTV, or the distribution of a television service over broadband access lines, is slated to take a turn toward full commercial deployment in 2005, and according to "The Business of IPTV: Global Analysis and Forecasts," a new study from TDG Research, the majority of global IPTV growth will be fueled by hybrid deployments that combine digital satellite or terrestrial TV services with IP-based TelcoTV offerings.
Some of the most compelling information forecast in the report include:
- Worldwide IPTV subscribers will pass the 20 million mark around 2010, a volume dominated by hybrid architectures deployments as opposed to stand-alone TelcoTV VoDSL solutions. IPTV-generated revenue will experience a compound annual growth rate (CAGR) of approximately 102 percent between year-end 2004 and year-end 2010.
- The cross-over point between MPEG-2 video transmission bandwidths and sustained broadband access bandwidths in volume deployments has now been reached, making it possible to deliver a quality digital video service to consumers over a broadband connection. Moreover, more efficient video codec chipsets are now starting to be available in ASIC technology thus making it possible for consumer premise equipment (CPE) to reach low-cost, volume-deployment level prices.
- The power of IP as a digital video transport technology will rapidly expand beyond TelcoTV operators to affect multiple network topologies. Satellite operators will augment their broadcast offerings with IPTV-based "on-demand" services in order to compete with cable TV players. Additionally, Digital Terrestrial Television or DTT adoption will also benefit greatly from IPTV-based premium offerings.
- For satellite TV service operators, IPTV will provide a means of extending their current broadcast offering to include on-demand movies and programming, thus allowing them to compete with cable's new video-on-demand services. IPTV and its more efficient codec technologies are also expected to facilitate the continued growth of HDTV channels, while being poised to enable an extension of their core DBS service beyond the satellite set-top box--for example, to mobile consumer devices connecting to the main satellite receiver.
- The primary competitive determinants for consumer adoption will be (1) diversity of content offerings, (2) pricing of services, and (3) creation of unique compelling bundled offerings.
- Early IPTV differentiators will include an "a la carte" pricing model, a move that will put pressure on the traditional business practices of incumbent PayTV operators.
- TelcoTV adoption around the world will vary greatly, as the penetration of PayTV and broadband differs. In markets such as the United States, where PayTV penetration approximates 80 percent, careful attention must be given to program pricing and packaging, as well as identifying specific target markets.
- Despite the increased use of IP-based video transport technologies, independent Web sites and Internet-based IP TV and video services will remain a niche proposition and may be aggregated or acquired by the larger IPTV operators.
As IPTV begins to gain momentum, service providers must ensure that they can deliver the high-quality entertainment that customers now demand. If indeed this application grows, equipment manufacturers, software providers, content managers and satellite operators will all benefit and that means good news for increased business and profits coming into the industry.