Viewing behaviour shifts as IPTV continues to gain traction
- Traditional broadcast services are under pressure from
multiple angles
Reading, UK - Friday, 23 May 2008
For immediate release
New research from analyst firm Canalys indicates that, while the
IPTV market will continue to gather momentum over the next four
years, competition from other video delivery platforms will make it
increasingly difficult for service providers to convince consumers
to invest in services. Established cable, satellite and terrestrial
digital TV offerings will continue to develop, and online video
services will increasingly compete for viewer attention, making it
essential that IPTV providers (and indeed pay-TV operators in
general) continue to develop their services in a bid to
differentiate them from the competition.
“IPTV growth was strong in 2007, albeit from a relatively small
base,” said Adrian Drozd, senior analyst covering the digital
entertainment market at Canalys. “The number of worldwide IPTV
subscribers increased from under 4 million at the end of 2006 to
over 10 million at the end of last year, with annualised
subscription revenue closing in on the €2 billion mark,” Drozd
continued. “Solid progress is expected to continue over the next
four years. By the end of 2011, Canalys expects the number of IPTV
subscribers to have reached 67 million – more than a six-fold
increase over 2007 levels.”
EMEA remains the leading region in terms of consumer uptake,
accounting for 54% of the worldwide subscriber total at the end of
last year. “France is still the driving force in the Western
European IPTV market,” explained Drozd, “With France Telecom having
passed the 1 million subscriber mark and both Free Telecom and Neuf
Cegetel continuing to expand.”
But rapid growth in the French market has been facilitated by
service providers’ desire to promote low-cost triple-play bundles,
where IPTV is part of the service mix, but not a huge revenue
generator in its own right. “While the growth of IPTV in France has
dwarfed the progress of most other European countries, it has
arguably come at the expense of revenue generation,” Drozd added.
“IPTV has helped to attract and retain subscribers, but the emphasis
must now shift to revenue generation to justify the significant
investments being made in video delivery.”
Outside Europe, progress has also been strong. “Seven IPTV
services had more than half a million subscribers each by the end of
2007,” said Drozd. “Verizon has since exceeded the 1 million mark in
the US and PCCW (Hong Kong) is closing in on that milestone.”
But despite early promise, major hurdles remain for the IPTV
market. Canalys believes that usurping the role of established cable
and satellite digital TV platforms will be a tougher challenge than
many in the IPTV industry expect. Convincing consumers to switch
pay-TV provider will be both difficult and expensive, unless
services are either highly price-competitive or offer considerable
benefits over the competition.
“Offering the same content and services as the competition will
not provide the necessary returns, but delivering a compelling mix
of on-demand and high-definition programming alongside a range of
advanced interactive services just might,” Drozd commented.
IPTV providers will not just have to compete with pay-TV
providers in their bid to gain consumer attention. Consumer viewing
behaviour is shifting, with more flexible access to content via
multiple platforms increasingly being sought. Time-shifted TV
services have been around for several years, with DVRs (digital
video recorders) becoming widespread and video-on-demand (VOD)
services becoming more common across Europe. While both types of
service are more established in the US, European broadcasters are
pushing ahead with online, PC-based catch-up services, essentially
cutting out the pay-TV operator middleman. Recent Canalys end-user
research conducted among 4,000 respondents in four major Western
European markets suggests that 46% of consumers are interested in
the concept of watching TV content on a PC after the time of
broadcast. With many of the services on offer available for free,
pay-TV providers will need to consider their own VOD strategies
carefully. The same Canalys survey highlighted that only around a
third of pay-TV subscribers had recently paid for a specific event
(pay-per-view or VOD-based), indicating that it may be a difficult
task to convince European consumers to pay for on-demand content.
To maintain momentum, IPTV providers must invest to boost the
quality of their services in terms of both content and service
availability. “But that investment needs to happen now,” Drozd
concluded. “Competing video delivery services continue to develop
rapidly in terms of functionality, availability and consumer
awareness, making it essential that IPTV offerings evolve and expand
to maximise the potential of the two-way interactive platform on
which they are based.”
About the IPTV Analysis service
IPTV Analysis Worldwide is a continuous advisory service focusing
on worldwide IPTV markets. Through regular reports and direct
analyst contact, Canalys examines and advises on the issues facing
service providers, vendors, and software, content and services
companies active in the IPTV sector. It looks at the key market
trends, service provider business models and opportunities for
hardware and software vendors.
About Canalys
Canalys specialises in delivering high-quality market data,
analysis and advice to the world’s leading technology vendors. It is
recognised as a key provider of continuous advisory services and
confidential custom projects for marketing managers and strategists
within blue-chip IT, telecoms, navigation and consumer electronics
companies. It has unrivalled expertise in routes to market for all
kinds of high technology products and services in the consumer, SMB
and large enterprise segments, and provides worldwide market data
and trends analysis.
Receiving updates
To receive future Canalys press releases
directly, please e-mail a request with your details to press@canalys.com
or complete this form
specifying the technology market topics in which you are most
interested.
|
