IPTV Doing Fine in an Uphill Battle

Carl Weinschenk

There has been a lot of interest in Internet protocol television (IPTV) from folks who see it as still another great way to distribute programming and from those who wonder what impact it will have on network traffic calculations if it explodes.


This week, FairPoint Communications said that it will run a 90-day test of the service over fiber-to-the-home network infrastructure in Portsmouth, N.H. This item quotes a company spokesman as saying that the test is a precursor to a possible rollout across the company's New England properties. The networks were bought from Verizon and initially were for the telco's FiOS project. The spokesperson said that the test also looked at how IPTV operates over digital subscriber line (DSL) networks.


IPTV has a fight on its hands, however. The bottom line is that once the glitz factor fades, the programming carried by IP networks is the same as what is carried by traditional broadcast signals. Thus, it will have to scratch and claw for every shard of market share it gets. In other words, IPTV isn't new and shiny -- it's old and shiny.


This Digital Lifescapes posting by David Deans reviews a recent report from Informa. The good news for IPTV proponents is that the report predicts that there will be 57 million IPTV households by 2013. There are yellow flags, however, despite the generally cheery top line numbers.


The vast majority of folks already have a way to get their television. Any gains by IPTV purveyors will largely come from convincing these folks to move. That's happening, but it's a tough way to earn a living -- a lot harder than a greenfield environment in which everyone starts on an equal footing with something that is completely new. The report says there will be 18.6 million IPTV viewers by the end of this year, an increase of more than 8 million since the end of 2007.


The Informa report upon which Deans commented look at things from the worldwide perspective. This TMCnet.com piece describes an ROA Group study on the progress being made in Japan, a vitally important piece of that big pie. The firm says that there will be more than 3 million IPTV subscribers there by 2012.


The report mixes apples and oranges to an extent: It says that the 3 million-plus figure represents 10 percent of existing FTTH subscribers, and that overall FTTH penetration is about 6 percent. The report does not say definitively that all IPTV customers are on FTTH networks, though it is clear that there is significant overlap. The report says that there only are 400,000 subscribers this year, but that significant growth rates are anticipated.


Deans and Informa are not the only analyst who thinks that IPTV faces stiff challenges. The Frost & Sullivan report highlighted in this release focuses on IPTV developments in Asia, but the takeaway is relevant all over the globe. The analyst concludes that telephone companies hoping to invade the market controlled by cable and satellite providers need to be proactive and take the initiative.


Still, the firm agrees that the future is bright for the technology. It says that IPTV penetration reached 4.1 million subscribers in the region last year and predicts that 22.4 million will get their television in this manner by the end of 2013. That, the release points out, is a compound annual growth rate of 32.7 percent. That would be an impressive feat -- especially considering that only eight of the 13 countries profiled have operational commercial services today.

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