In the space of five years, IPTV has evolved from a fringe technology adopted by a few pioneers (such as Fastweb and PCCW) to an alternative digital pay-TV platform in most developed markets and, increasingly, in emerging markets as well. Despite its rapid growth, IPTV continues to account for a small minority of global pay-TV subscribers, and there is much to be done to stimulate further adoption.
Most of the speakers at the TV over Broadband Conference, which was held in Paris on 20–23 January, came from the vendor community, and many of them – including Pixelmetrix and Witbe – were focused on monitoring IPTV quality of experience (QoE), which is more end-user focused than traditional quality of service (QoS) parameters. This is a critical issue for IPTV operators, particularly as service take-up starts to rise, thus placing increasing demands on telecoms infrastructure that wasn’t designed with the delivery of video services in mind. Unlike their competitors in the cable, satellite and DTT industries, whose infrastructure is optimised for their core business of delivering linear programming, the telcos’ video infrastructure has been transplanted into an environment that was designed for voice and broadband access services, leading to high levels of complexity. As a result, vendors are developing more-holistic QoE solutions to manage and improve the delivery of IPTV services to subscribers.
But one of the clear messages to come out of the conference from vendors such as Microsoft and Orca Interactive was that, in many developed markets, a package of digital TV channels, supplemented by VoD and PVR devices, is no longer sufficient to attract and retain subscribers, no matter how competently it is delivered. Traditional competitors, such as cable operators, are converting their legacy analogue TV subscriber base to digital packages and are improving their services. In addition, emerging competition from ‘over-the-top’ online video services, which deliver video directly to end users over the public Internet (primarily to the PC, but increasingly direct to the TV set), is transforming consumer expectations and behaviour. In response, IPTV operators need to clearly differentiate their services from those of their competitors, using IP networks to offer converged services to multiple devices within the home and beyond, while enabling consumers to navigate through an ever-growing maze of content from multiple sources with higher levels of personalisation.
As part of Analysys Mason’s newly launched Consumer Content and Applications research programme, we will track developments in the IPTV market, and provide market analysis of the wider pay-TV industry as well as strategic recommendations. Forthcoming publications include a Perspective on IPTV’s varying degrees of success in Europe, as well as a report on pay-TV in Central and Eastern Europe, which will complement our previous report on the market in Western Europe.
