IPTV MARKET ANALYSIS

Market Challenges And Opportunities

Market Dynamics- Restraint

1. Strong competition from cable TV and satellite TV operators is expected to restrain growth of the global IPTV market during the forecast period

There is a strong competition offered by cable TV and satellite TV operators in emerging economies. Growth of IPTV is typically dependent upon broadband subscriptions. Although IPTV offers additional advantages such as interactive service and superior quality, it can only be deployed in the households that have a provision for a broadband connection. Furthermore, in emerging economies such as India with low internet penetration, the acceptance of IPTV is still at the nascent stage. Lack of awareness regarding the features offered by IPTV such as edutainment and interactivity is the prime reason behind its low popularity in the country.

2. Major technical challenges related to IPTV are expected to hinder the global IPTV market growth over the forecast period

Many emerging economies are far behind in terms of broadband networks. The challenges faced during the provisioning of IPTV service impact the entire service channel, right from the consumers to service providers. For instance, consumers wishing to switch their TV service from cable to a telco’s bundle of voice, IPTV, and data face multiple challenges such as low bandwidth, or absence of the requisite IP functionality or backplane capacity with the existing infrastructure. Currently, the most critical requirement for IPTV is the availability of requisite infrastructure. IPTV requires high-quality broadband connections which are still not supported in many emerging regions. Thus, these factors are expected to hinder the global IPTV market growth in the near future.

Market Opportunities

1. Integration of advanced technologies with IPTV systems can present lucrative growth opportunities in the global IPTV market

Geriatric population, i.e., people aged 55 years and above spend the maximum number of hours watching TV among all age groups globally. According to the Television Bureau of Canada, viewers aged 55 years and above watch more television than any other age group. However, elderly people often face challenges with the new technology and tend to avoid it due to its complexity. Although the integration of social networking sites with IPTV fulfills many leisure-time requirements and expectations, the elderly population finds it challenging to operate or access the same. Acknowledging the existence of this technology gap between the generations, certain research universities are working on reducing the complexities associated with it in order to help the end-user adapt to new technologies such as IPTV and social networking sites with minimal effort. For instance, the researchers are working on a system to integrate IPTV with social networking websites such as Twitter using a mobile phone.

2. Complementing IPTV platforms with over-the-top (OTT) content can provide major business opportunities in the global IPTV market

Many telcos consider the increase in demand for OTT as a restraint for growth of the IPTV market with the belief that OTT would change their role in the pay-TV market and hence, cannibalize IPTV revenues. However, the market scenario is changing fast and some operators are already trying to exploit the potential opportunity associated with OTT in order to boost IPTV revenue. OTT is serving as a motivation for the pay-TV market by pushing the telcos to improve their IPTV services with multi-screens. Operators are increasingly entering into non-managed OTT environments alongside their managed IPTV services, and are using the open internet to offer video services to any potential customer within the connectivity perimeter of their broadband network, irrespective of whether they are an existing customer or not.

2. Increase in internet video advertising is expected to propel the global ITPV market growth over the forecast

Internet video advertising has gained significant traction in the market. It offers a broader and more expansive platform for business owners to market their products and services. Besides, it is more sophisticated and cost-efficient than conventional modes of advertising and marketing. Numerous brands in the market are opting for internet video advertising, in order to promote their products. Therefore, these factors are expected to propel the global IPTV market growth over the forecast period.

Market Dynamics- Drivers

1. Growing demand for high-definition channels and video on demand is expected to drive growth of the global IPTV market during the forecast period

The demand for value-added services such as high-definition (HD) and video-on-demand (VOD) is driving growth of the market. The pay-TV market including D2H service providers, cable service providers, and IPTV network service providers has witnessed a decrease in the average revenue per user (ARPU) as a result of providing standard definition services. As a result of this, key broadcasters have already shifted to HD channels and the trend is expected to continue in the near future. Since there is an increased demand for HD content globally, IPTV providers are enhancing their HD offerings, in order to increase their market presence. For instance, IPTV service providers such as AT&T, Verizon, and SureWest, along with the cable video service providers such as Comcast, Time Warner, and Cablevision in the U.S. are in a fierce race to increase their customer base. Hence, these factors are expected to drive growth of the global IPTV market during the forecast period.