The number of subscribers to IPTV services in North America quadrupled last year, but still reached only 1.2 million homes. These mainly seem to be net additions to the pay-television market, rather than at the expense of satellite, which gained 1.5 million customers.
The Verizon FiOS service had 943,000 subscribers at the end of 2007, while the AT&T U-Verse service had 231,000. Taken together this represents nearly a 300% increase on the previous year but still represents rather slow progress.
Meanwhile, satellite subscriber numbers rose. DIRECTV added 878,000 net subscribers over the year, reaching 16.8 million at the end of 2007. Dish Network had 13.7 million subscribers at the end of 2007, up 675,000 on the previous year. So between them, the satellite operators added more subscribers than the total number of IPTV homes in America, despite considerable investment from Verizon and AT&T in the new services.
The early hypothesis was that IPTV subscribers would come at the expense of satellite, explained Pamela Tufegdzic, an analyst at research firm iSuppli. “The initial results show that IPTV subscribers in the United States still are mostly net additions to the pay-television market.”
However, the satellite providers still face a challenge from their telco counterparts. “These companies previously partnered with the telcos to offer television service to compete with the bundled voice and video offerings from the cable providers. As they try to expand into IPTV, the satellite providers now find that a significant portion of their subscriber base of television subscribers is owned by the telcos.”
Significant growth is still predicted for IPTV services, with iSuppli forecasting a rise from around 10 million homes to 82.6 million by 2011, with 17.7 million in North and South America.
Despite these forecasts, informitv remains more cautious about the room for growth in a saturated pay-television market. Any significant increase will have to come at the expense of existing services from satellite and cable operators, which will no doubt respond to increased competition to maintain their share.