Although 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, according to a new report from Canalys.
The report says that 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 pay-TV operators in general) continue to develop their services in a bid to differentiate them from the competition.
Adrian Drozd, senior analyst covering the digital entertainment market at Canalys, said: “IPTV growth was strong in 2007, albeit from a relatively small base.
“The number of worldwide IPTV subscribers increased from under four 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.
“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.”
IPTV providers will not just have to compete with pay-TV providers in their bid to gain consumer attention, said Canalys. 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.
MRG recently predicted that worldwide IPTV subscribers will grow from 24.4 million in 2008 to 92.8 million in 2012, with IPTV service revenue totaling $37.1 billion by 2012 (see IPTV Subscribers Forecast To Reach 92.8m In 2012).
Meanwhile, Analysys Mason published a report predicting that the increasing deployment of IPTV services will see the pay-TV market in Western Europe enjoy a modest rate of growth in the number of households subscribing to pay-TV services (see IPTV To Drive Take-Up Of Pay TV In Western Europe).
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