RESEARCH ROUND-UP

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RESEARCH ROUND-UP

  1. 1. RESEARCH ROUND-UP Steady growth growth, IPTV Operators world- major French IPTV Operators as nine million net subscriber continues wide are expected to continue they compete to bring better additions in 2008, 40% of which investing in improved Quality-of- quality and unique content to will come from markets in the Asia- While threats of financial Service, ease-of-operation, HD their users; and as new competi- Pacific region.” collapse lurk at every corner, content, exclusive programming tion comes online in 2009. Many The Forecast also revealed that global telcos apparently did and time-shifting as differentiat- European IPTV Operators have enough belt-tightening back in ing features. increased subscribers by offer- ing differentiating services, exclu- sive content and interactive fea- tures. Likewise in Asia, despite flat growth in Japan, rapid growth is expect- ed in China, Taiwan and Korea. By 2012 North America will have only about a 17% with an increasing number of telcos share of the total deploying fibre amid an increasing worldwide sub- need to replace their fixed telepho- scribers, howev- ny business, FTTx networks are er it will dominate expected to account for close to the global market 30% of the IPTV revenue in 2013. in terms of gross service revenue at about $13 bil- Online apps scale peak lion, due to high- er ARPU. A survey monitoring global Together, Verizon Internet traffic trends based on and AT&T are millions of subscribers from projected to have around the world has come up Source: MRG, Inc. about 3m sub- with real proof of the inevitable 2000 to 2003 to lessen their According to Jose Alvear, scribers by the end of 2008, and shift in consumer behaviour as exposure to financial volatility. IPTV Analyst at MRG (left), the they should continue their rapid online entertainment-based appli- Such are the findings of MRG report, IPTV Global growth into 2012. Smaller US cations such as gaming, video Multimedia Research Groupís Forecast 2008 to 2012, gives an and Canadian Operators are fol- streaming, social networking and latest IPTV Global Forecast, overview of the differentiating lowing similar strategies. VoIP dominate peak evening which indicated that that global services offered by the top IPTV hours between 18:00 and 23:00 IPTV subscribers will grow from Operators. "Operators continue hours. These real-time, interactive 20.4m IPTV subscribers in 2008 to add impressive new services Cable to lose market applications increase up to 50% to 89.6m in 2012. To drive this and improved QoS (Quality of per subscriber during the peak share Service) in competitive markets evening hours. especially in Europe and North IPTV’s share of the overall pay-TV America," he notes. subscriber base will grow from 3% MRG suggests that in in 2008 to 14% in 2013 at the Europe, steady IPTV subscriber expense of cable TV’s share, which growth continues while more HD will decline from 76% to 61% over channels are being offered to the same period, according to a Western and Eastern European new Media Forecast just released subscribers. By 2012, European by Pyramid Research. subscribers will still be slightly “IPTV operators continue to ahead of Asia, with Europe make strong strides in gaining pay- maintaining 41.5% of the TV market share,” noted Özgür worldwide subscriber market Aytar, senior research manager, and Asia, 35.8%. Despite eco- broadband and media (above). nomic contraction, consistent “Pyramid Research estimates that growth continues at the three IPTV will drive a global total of www.advanced-television.com IPTV INTERNATIONAL 21
  2. 2. RESEARCH ROUND-UP panel to use Nielsen technology firm conclusions about behaviour and methodology to directly meas- but the early trends seem to indi- ure the interaction between TV and cate that online usage is comple- Internet by the same people in the menting, not substituting for, tradi- same household. The sample con- tional television viewing. We will sists of nearly 3,000 people in more be watching this trend carefully to than 1,000 households who were see how television viewing drives either previously part of Nielsen’s Internet usage and visa versa.” live national TV sample and have agreed to continue to be monitored by Nielsen, or new homes installed IPTV “in Wonderland” specifically for convergence Telco IPTV strategies have been research. likened to Alice running in Other findings from Nielsen’s Wonderland, according to a “Our research implies that applications consume up to 64% TV/Internet Convergence Panel: recent Screen Digest study, IPTV families are spending more of of total downstream bandwidth. Roughly 50% of the Business Models: Profit and Loss their leisure time during evening This large share of bandwidth is Convergence Panel panellists had in the Telco TV Space. hours on Internet-based enter- composed of many different viewed some streaming content According to report author tainment and communication types of traffic, including web online. Those streaming the most Richard Broughton, these strate- such as YouTube, Xbox Live and browsing, social sites with large included Female Teens (82%), Male gies can be likened to a state- Skype,” said Dave Caputo, amounts of digital photos and Teens (64%), Men 18 to 34 (57%) ment made by the Red Queen in Sandvine co-founder, president buffered real-time video sites and Men 35 to 54 (55%). Lewis Carroll’s Through the and CEO. “Not only does this such as YouTube. Nearly 60% of panellists and Looking Glass. Despite rushing signal a dramatic shift in con- more than 80% of people who out IPTV services to differentiate sumer behaviour but emphasis- watched TV and used the Internet themselves, their competitive es the rapid evolution and real TV Viewing, Internet that month had simultaneous ses- position remains unchanged. As strain placed on the Internet.” sions — watching TV and being the Red Queen says to Alice: use complementary According to the research, “Now, here, you see, it takes all peer-to-peer (P2P) traffic remains The Nielsen Company’s new the running you can do, to keep in dominant in the upstream direc- TV/Internet Convergence Panel, the same place. If you want to get tion totalling 61% of network traf- which electronically measures both somewhere else, you must run at fic and is also responsible for television and Internet usage in the least twice as fast as that!” more than 22% of downstream same homes, has found that televi- According to Broughton, bandwidth consumption world- sion viewing and online video IPTV services were seen as a wide. The study indicates that streaming are complementary way to reduce churn in broad- the amount of P2P traffic per activities. band markets and boost addi- subscriber maintains a relatively According to the convergence tions by making the overall high steady state during times panel, the heaviest users of the product more attractive to cus- when networks are facing their Internet are also among the heavi- tomers. Findings reveal, howev- highest volumes of traffic. est viewers of television: the top er, that IPTV has not covered its “Bulk bandwidth applications fifth of Internet users spend more costs in reduced churn rates like P2P are on all day, everyday than 250 minutes per day watching and has had little or no positive and are unaffected by changes television, compared to 220 min- growth impact on the market to network utilisation,” added utes of television viewing by people overall. Caputo. “This reinforces the who do not use the Internet at all. online at the same minute. This Despite this, notes the report, importance of protecting real- Nielsen found that the reverse group tends to be very heavy users telcos are pressing ahead with time applications that are sensi- is true as well - the lowest con- of both TV and Internet. their plans, with Europe forecast tive to jitter and latency during sumers of television have the low- Teens are the most likely demo- to have over 12m IPTV sub- times of peak usage. Effective est usage levels for the Internet. graphic to have simultaneous scribers by the end of the year network traffic optimisation tech- Nielsen also found that nearly 31% TV/Internet usage, but Adults 35 to and well in excess of 22m by the niques use sophisticated poli- of in-home Internet activity takes 54 have the most simultaneous end of 2012. On the positive side, cies that balance network place while the user is watching usage minutes. some IPTV service providers in capacity, application require- television, demonstrating that “With our Convergence Panel the heavily cabled markets of ments and subscriber quality of there is a significant amount of we can now, for the first time, Belgium, Sweden and Germany experience in real-time.” simultaneous Internet and televi- observe what could only be have found that broadband addi- Other findings include the sion usage. Conversely, about 4% guessed at before - how television tions have seen an increase rela- observation that web traffic and of television viewing occurs when viewing and Internet usage interact tive to the growth of other DSL streaming videos account for the consumer is also using the and affect each other,” said players, bringing them more in 59% of downstream bandwidth Internet. Howard Shimmel, SVP, client line with rival cable triple-play consumption. During the The Nielsen TV/Internet insights, The Nielsen Company operations and the market aver- evening’s peak hours these web Convergence Panel, is the first (above). “It is too early to draw any age. In these cases, the launch of 22 IPTV INTERNATIONAL www.advanced-television.com
  3. 3. social network sites such as looking beyond their underlying MySpace and Facebook. In addi- network capabilities and are tion, device manufacturers are focusing on real and value-added offering their own Internet-based benefits for their customers, offerings, such as NeuLion and according to ABI Research. AppleTV, while some broadcasters Telco-IPTV operators’ future are going directly to the success will be determined by a consumer over the Internet, such as wide range of internal and BBC’s iPlayer, and NBC and Fox’s external factors while they man- Hulu.com. Over-the-top video age the expansion stage of their providers, such as Amazon’s Video offerings and find their investment on Demand, and VuDu, as well as needs shifting as they target both video rental services, such as existing and prospective Netflix and Blockbuster, are devel- customers. oping or have developed a com- “In the current economic bined set-top box and video down- climate, allocation of capital and load service. resources is becoming a difficult IPTV has returned the companies Red Queen in Through the According to Gartner, however, proposition for all IPTV operators to their original position in the Looking Glass by running to stay the global market is characterised as they consider more fibre and broadband market. Broughton where they already are. by vast regional variations. Although back-office investments,” says that in these markets, IPTV is the fundamental reasons why tele- commented ABI Research not so much putting the compa- com carriers are launching IPTV are principal analyst Robert Clark. nies at an advantage, just at less Subs to grow 64% basically the same, the adoption “Because of local pay-TV of a disadvantage. Worldwide subscriptions to IPTV profile, the go-to-market strategies cultures, regulation and infrastruc- In other markets including the services are on track to reach that providers embrace and, in the ture differences, and the trend UK, France and Italy, where pay- 19.6m subscribers in 2008, a 64.1% longer term, the success of IPTV, towards Multi-Play, web-based TV holds less sway over con- increase from 12m subscribers in are governed by local factors. and interactive sumers, the positive impact has 2007, according to research firm Western Europe is the region services integration, success for been more muted. With a number Gartner. Worldwide IPTV revenue is with the largest number of IPTV IPTV operators will be determined of services in the markets pulling projected to total $4.5 billion in subscribers, it is on track to have by their upcoming investment in low TV revenues, there is the 2008, a 93.5% increase from 2007 8.2m subscribers in 2008, and will decisions.” question as to whether services revenue of $2.3 billion. grow to 18.8m subscribers in 2012. “Broadband, mobile, online can ever repay investment. A key In 2008, 1.1% of households North America is the largest market gaming and storage, and home way for services to get out of this worldwide will be subscribers of for IPTV revenue, forecast to reach networking, in addition to the rut is to increase their ARPUs IPTV. By the end of 2012, Gartner $2 billion in 2008, and grow to $8 professional and technical through the addition of further forecasts worldwide household billion in 2012. services support that can be packages and content. penetration of IPTV will be 2.8%, “Before 2008, the IPTV required to deliver Multi-Play According to Broughton, incre- while worldwide IPTV revenue is operators’ emphasis had been to offers seamlessly, are becoming mental changes to service offerings do, unfortunately for IPTV providers, IPTV Subscribers and Service Revenue, Worldwide, 2006-2012 make it simpler for competitors to respond in kind, getting operators 2006 2007 2008 2009 2010 2011 2012 nowhere. This is why from a IPTV Subscribers (Thousands) competitive stand-point, a move Total IPTV Subscribers 5,490 11,972 19,649 28,330 37,359 46,159 54,758 such as buying sports rights might Growth - 118.1% 64.1% 44.2% 31.9% 23.6% 18.6% make sense. As the report points Source: Gartner (September 2008) out, however, it is extremely difficult for IPTV service providers to make expected to total $19 billion in spread their footprint and effective- intricately tied to IPTV operators’ a profit from acquisitions of premi- 2012. ly provide a ‘me too’ solution to success,” added Clark. um sports rights – even Belgacom “The biggest change since 2007 cable and satellite,” said Jopling. IPTV combined with Multi-Play has yet to break even. is the rapid advent of new entrants “In the future, especially in the is reaching a stage where con- He concludes that adding making inroads in consumer video developed markets, we will see an tent and service options still mat- small amounts of content and consumption and placing greater emphasis on innovation and ter most, but as network offerings novel features is certainly a strate- demands on IPTV operators to inno- differentiated pay-TV services.” and device options proliferate gy for telcos to make their TV vate,” said Gartner research direc- consumers are also weighing the services more profitable, but sug- tor Elroy Jopling. “The video con- cost, value and ease of imple- gests that it fails to address the sumption field will become increas- Operators weigh mentation in the home. Operators fundamental strategy issues of the ingly crowded.” investment options are only now beginning to offer IT TV and broadband businesses. Gartner points out that new support services to resolve Providers who are offering IPTV competitors include portal players As they enter the growth stage of in-home and self-service installa- services are behaving like the such as YouTube and Joost, and their industry, IPTV operators are tion issues raised by subscribers. www.advanced-television.com IPTV INTERNATIONAL 23

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