Internet protocol television, or IPTV, via satellite is a niche market offering, accounting for a relatively small percentage share of the market potential that terrestrial- based platforms are likely to generate, but the market still provides a unique opportunity for the satellite industry, according to new research issued by Northern Sky Research.

According to the “IPTV via Satellite: Assessing the Market Opportunity for Satellite Delivered IPTV Services” report, released Sept. 20, satellite-based total revenues from 2005 to 2010 are expected to exceed $1.6 billion (Northern Sky Research notes that some forecasters are predicting there will be $7 billion in revenues from terrestrial-based services in 2010 alone). But regardless of the fraction of the IPTV industry that satellites represent, the independent research firm notes that the growing preference for IP, which satellite service providers are incorporating in their offering, and the compelling role of satellite services in the video markets worldwide, make IPTV via satellite services a compelling value proposition for select regions.

Northern Sky Research expects the initial demand to be generated largely by entities that are settling up infrastructure to enable IPTV via satellite services. These services mainly require transponder lease contracts from satellite operators for the delivery of content to IPTV gateways. Once the infrastructure is in place, the market is expected to move quickly to retail business models where revenue-sharing arrangements between satellite companies and the owners of content will lead to higher margins as satellite players participate in revenue sharing from the subscriber’s monthly service fees.