IP Video Key to Broadband Networks' Continued Maturation

Carl Weinschenk

There generally isn't a specific point in time when a new telecommunications platform crosses the Rubicon from the periphery to the mainstream. The process is far more subtle and nuanced. But at some point it becomes apparent to everybody that the technology has become commonplace.


That has happened with online video. ABI Research says that browser-based video viewership has gone from 32 percent of online U.S. houses last year to 63 percent now. The reason, according to the analyst on the project, is the richness and variety of content available. The trend will continue. The report, entitled "Broadband Video Usage Habits of U.S. Consumers," suggests that younger users are likely to get their video online.


Gartner also suggests great increases. It released a report last week that said IPTV subscriptions will increase 64.1 percent worldwide from 12 million to 19.6 million between last year and 2008. The revenue picture is even better: It says the total will nearly double from $2.3 billion to $4.5 billion. The long-term picture also is bright: This year, IPTV subscribers represent 1.1 percent of households worldwide. This percentage is expected to grow to 2.8 by the end of 2012, with revenues of $19.6 billion.


The report suggests that a variety of existing and emerging content sources, including "portal players," social networks and even device manufacturers are driving the sector. There are vast differences in regional strength, the report says. Western Europe has the greatest number of subscribers, while North America produces the most revenue.


The situation doesn't seem as positive in Europe, at least according to a new report from Screen Digest. The report, "IPTV Business Models: Profit and Loss in the Telco TV Space" says there were more than 8 million households using IPTV at the end of last year, with more than 22 million homes likely to receive programming this way by 2012. The report says that bandwidth bottlenecks near potential users' homes is a big problem, though.


IPTV is packaged three ways in Europe: bundled with free television, as a basic pay service or as a premium service. The final points from the highlights attest, in one way or another, to the conclusion that the platform hasn't yet been overly successful. There are two parallel reasons that the fate of IPTV is important. The first is simply that its success means that providers are making money, and can lead to innovative services, such as AT&T's plan to integrate the iPhone with the IPTV element of its U-Verse fiber platform.


The second and perhaps even more important long-term issue is that presenting IPTV requires the industry to create an infrastructure with a bandwidth-intensive infrastructure in which latency and jitter numbers are good. In short, the growth of IPTV suggests the growth of a stable and robust network. This is good, of course, for any other advanced service the provider seeks to offer. This exhaustive Informa piece describes some of the issues specific to IPTV. The bottom line is that successfully presenting complex and demanding video will provide great benefits to the networks' overall health.

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