Sunday, November 14, 2010

IPTV & VoD market analysis by OVUM

Looking through the large amount of information on the Internet television market, I stumbled upon a market analysis from a well-known consulting firm OVUM. They published a very interesting report. See below...

Market conditions for IPTV vary substantially
There is a great deal of variation by country in many of the factors that affect the market for TV services: the mix of terrestrial and satellite delivery platforms in use, payment (or non-payment) regimes, regulation, government policy and customer content preferences, to name a few. The complexity of the picture is compounded when we consider TV over IP broadband. Factors which add further complexity include the mix of broadband technologies in use, the competitive landscape for telecoms, and separate sets of regulation and government policy.
Rather than attempt to produce global forecasts for IPTV and VoD, we have instead focused on ten of the major markets around the world, in order to take into account the variation in market conditions. The differences apply to platform availability, potential of existing DSL networks, technology choices, content pricing structures and competitive frameworks. In some markets, incumbents are advanced in their deployment of both IPTV (broadcast) and VoD. In others, TV alone is their main focus. Some will benefit from high ARPUs for pay TV upwards of euro40 per month; others will struggle with customers used to spending less than euro10.
Pay TV has considerable room for growth in a number of markets
Both pay TV and digital penetration remain low in some of the major markets covered. We believe telcos take existing TV market share from other providers, but also help to grow the overall pay-TV market through driving digital penetration, wider content availability and better services, which should result in more consumers spending more money on TV and video as a whole.
Lessons from digital terrestrial television (DTT) rollout have proved that many consumers are looking for a second delivery channel into the home for TV in order to support multiple TV sets. The current limited ability of WiFi networks to carry video around the home will also act as a key driver for IPTV to act as a complementary platform, not a substitute platform, in a significant number of cases at least in the short term.
DTT will play a competing and complementary role
DTT is a true broadcast technology and is much quicker, simpler and cheaper to roll out than TV over broadband. In some cases, therefore, DTT will impact negatively on IPTV growth. DTT platforms are offering a lot of free-to-air content, with just a one-off
charge for the set-top box. This means some consumers will allocate spend on DTT in preference to IPTV (or other pay TV platforms) when they first go digital.
However, in the longer term, DTT will help to stimulate overall uptake of digital TV; and where DTT providers start to add paid-for elements, IPTV will then be able to compete on a more even footing. Additionally, in some cases DTT will provide a valuable platform for telcos that are launching hybrid DTT/VoD strategies.
IPTV growth will be modest over the forecast period
IPTV penetration of the broadband customer base will vary between markets, but within our forecast five-year growth period (up to the end of 2009) we are cautious in our overall view of IPTV and VoD growth. Lessons from operators who have had services running for over a year prove there are still a number of technical, competitive and cultural (brand awareness) barriers to overcome.
VoD will be a key strategy in some markets
In some markets incumbents and competing telcos will choose to include a strong focus on VoD in their strategies. This is the case, for example, where:
          existing pay -TV platforms are moving to incorporate VoD;
          where pay-TV markets are particularly weak.

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