IPTV to Shake Up TV Market with Subscriber Boom

Staff Reporter -- Electronic News, 8/4/2006

The traditional TV market is set for a serious shake-up. The worldwide subscriber base for Internet Protocol Television (IPTV) services expected to expand by a factor of more than 26 from 2005 to 2010, spurring a competitive battle between video providers both old and new, research firm iSuppli Corp. predicts.

Global IPTV subscribers will grow to slightly more than 63 million in 2010, rising at a compound annual growth rate of 92.1 percent from 2.4 million in 2005, the firm said. The IPTV subscriber base will generate more than $27 billion in overall IPTV services revenue in 2010.

While video services will account for the largest portion of revenue, value-added media services and IPTV operator advertising will combine to represent more than 14 percent of IPTV services revenue in 2010. Furthermore, across all IPTV services, the corresponding content licensing revenue will reach $11 billion in 2010, the firm reported

"The fight to capture the expanding base of IPTV subscribers will put telecom operators on a collision course with existing pay-TV market competitors and with a new class of broadband video portals as they roll-out progressively more sophisticated offerings," Mark Kirstein , VP of multimedia content and services for iSuppli, said in a statement.

The current global IPTV market is early in its first phase: basic service deployment, the firm said. The second phase will add an array of value-added and interactive services, and phase three will bring dramatic improvements in integration and interactivity.

In this pending battle for subscribers, providing a competitive video offering is merely the cost of entry for IPTV operators, the firm said. Beyond competitive video offerings, iSuppli said IPTV services will include interactivity, such as communication, community, voting and interactive advertising. Integration across multiple platforms is also an expected offering of the service, across voice and data services as well as across content types.

Further differentiating itself from traditional television technologies, IPTV's personalization features are expected to include individualized advertising, video programming and recording, and intelligent TV recommendations. Value-added services could include on-demand gaming, music, media applications, home networking management, security and data.

Video service providers won't be the only ones enjoying the coming IPTV boom: Infrastructure gear manufacturers, set-top box makers, software vendors and semiconductor suppliers will see the spoils of the technology's popularity, iSuppli predicted.

The European market has taken the early lead in the global IPTV market, both for subscribers and for revenue. However, Asia will generate faster growth than the other regions and will achieve the largest subscriber base by the end of this year, the firm said. The Americas region is not out of the game: it will lead the world in terms of IPTV dollars starting this year.