Television services delivered over broadband will reach just under 20 million subscribers by the end of 2008, just over 1% of households, according to research company Gartner. That number is forecast to rise to 2.8% by the end of 2012. However, Screen Digest suggests that for most operators IPTV has not covered its costs in reduced churn rates and has resulted in little or no growth in the broadband market.
Gartner defines internet protocol television in terms of services delivered over a managed network to a television through a set-top box and excludes other internet offerings. However, it notes that the market is becoming increasingly crowded with services delivered over the internet.
“The biggest change since 2007 is the rapid advent of new entrants making inroads in consumer video consumption and placing greater demands on IPTV operators to innovate,” said Gartner research director Elroy Jopling. “The video consumption field will become increasingly crowded.”
“Before 2008, the IPTV operators’ emphasis had been to spread their footprint and effectively provide a ‘me too’ solution to cable and satellite,” he added. “In the future, especially in the developed markets, we will see an emphasis on innovation and differentiated pay-TV services.”
Gartner reports that Western Europe has the most IPTV subscribers, on track to reach over 8 million in 2008 and 18.8 million in 2012.
In September 2006, Gartner predicted that there would be nearly 25 million subscribers in 2008 and nearly 50 million in 2010.
The variance in analyst forecasts suggests that they should be considered as at best estimates. Back in September 2005, informitv reported consensus estimates for the size of the global IPTV market to be 25 million subscribers in 2010, although noting that it is entirely possible that these analyst forecasts could be exceeded.
At the time, Multimedia Research Group forecast that there would be 25.3 million subscribers worldwide in 2008, while Informa predicted 25.9 million by the end of 2010, and The Diffusion Group forecast 37 million by 2010. Screen Digest predicted that there would be 5.7 million IPTV subscribers in Europe by 2010, a number that has already been exceeded, while Strategy Analytics forecast that there would be 11.3 million subscribers in Europe by the end of 2010, which certainly seems achievable.
A new report from Screen Digest now expects there to be 12 million IPTV subscribers in Europe by the end of 2008, significantly more than reported by Gartner, and expects there to be more than 22 million in Europe by the end of 2012. Over a third of these are expected to be in France, with a tenth in Germany, followed by the United Kingdom, Italy, Spain, then Russia, apparently by then considered to be part of Europe.
Screen Digest suggests that despite rushing out IPTV services as a point of differentiation, the competitive position of telcos remains unchanged. “It takes all the running you can do to keep in the same place,” as the Red Queen said to Alice in Through the Looking Glass. “If you want to get somewhere else, you must run at least twice as fast as that!”
With a number of services pulling in low television revenues, Screen Digest poses the question as to whether they can ever repay their investment. Their report points out that it is difficult for providers to make a profit even from the acquisition of premium sports rights. Even the Belgacom which has had some success in this respect has yet to break even.