Worldwide subscriptions to internet Protocol television (IPTV) services are on pace to reach 19.6 million subscribers in 2008, a 64.1 per cent increase from 12 million subscribers in 2007, according to research company, Gartner, Inc. Worldwide IPTV revenue is projected to total $4.5 billion in 2008, a 93.5 per cent increase from 2007 revenue of $2.3 billion.
In 2008, 1.1 per cent of households worldwide will be subscribers of IPTV. By the end of 2012, Gartner forecasts worldwide household penetration of IPTV will be 2.8 per cent, while worldwide IPTV revenue is expected to total $19 billion in 2012.
"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."
New competitors include portal players such as YouTube and Joost, and social network sites such as MySpace and Facebook. In addition, device manufacturers are offering their own Internet-based offerings, such as NeuLion and AppleTV, while some broadcasters are going directly to the consumer over the internet, such as BBC's iPlayer, and NBC and Fox's Hulu.com. Over-the-top video providers, such as Amazon's Video on Demand, and VuDu, as well as video rental services, such as Netflix and Blockbuster, are developing or have developed a combined set-top box and video download service.
However, the global market is characterized by vast regional variations. Although the fundamental reasons why telecom carriers are launching IPTV are basically the same, the adoption profile, the go-to-market strategies that providers embrace and, in the longer term, the success of IPTV, are governed by local factors.
Western Europe is the region with the largest number of IPTV subscribers. Western Europe is on track to have 8.2 million subscribers in 2008, and will grow to 18.8 million subscribers in 2012. North America is the largest market for IPTV revenue. IPTV revenue in North America is forecast to reach $2 billion in 2008, and grow to $8 billion in 2012.
"Before 2008, the IPTV operators' emphasis had been to spread their footprint and effectively provide a "me too" solution to cable and satellite," said Mr Jopling. "In the future, especially in the developed markets, we will see an emphasis on innovation and differentiated pay-TV services."
Gartner defines IPTV as the use of a carrier-based managed IP broadband network to deliver television and video content services to the end-user's TV set using a set-top box, and delivering picture quality at least equivalent to existing pay-TV or free-to-air services. Content delivered over the internet or delivered only to a PC is not included. Video content can be broadcast-style pay-TV, video on demand (VOD) or other video interactive services.
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