& cplSiteName &

IPTV in the USA

Light Reading

Telco IPTV is quivering between being the next big thing in U.S. mass-market media and a me-too justification for a very expensive long-term fiber-access rollout. Will IPTV really work for the telcos? Where does it go from here?

After one of the longest gestations in the history of North American telecom services -- the first implementations having occurred in a small way in the late 1990s -- telco IPTV has finally reached a sizable early-adopter phase, with U.S. carriers such as AT&T Inc. (NYSE: T) and Verizon Communications Inc. (NYSE: VZ) moving aggressively ahead with their deployments. By fall 2008 these two had about 1.5 million IPTV subscribers between them, although the figures are slightly misleading because Verizon is running a hybrid IPTV system. (See What’s IPTV?)

Elsewhere, IPTV indeed seems to be beginning to boom. By the end of 2007, Asia-Pacific (mainly China, Hong Kong, South Korea, Taiwan, Singapore, and Japan) accounted for about one third of the world’s then 10 million or so IPTV subscribers. Hong Kong has seen particularly rapid take-up: Over 40 percent of DSL subscribers now use IPTV, following its 2003 launch by incumbent telco PCCW Ltd. (NYSE: PCW; Hong Kong: 0008) and the Hong Kong Broadband Network Ltd. (HKBN) , according to the International Telecommunication Union (ITU) ’s "Asia-Pacific Telecommunication/ICT Indicators 2008." And significant IPTV deployments are underway in such European countries as Belgium, France (over 3 million subscribers), Italy, the Netherlands, Spain, and Sweden.

And rapid growth is forecast. Analyst firm Infonetics Research Inc. estimated earlier in 2008 that there will be 93 million IPTV subscribers worldwide by 2011. Similarly, Pyramid Research, in January, predicted that the IPTV market worldwide would have 99.4 million subscribers by 2012. Strategy Analytics estimates that U.S. IPTV service revenues will approach $14 billion in 2012, growing from $694 million in 2007.

In the U.S., total IPTV subscribers went from a mere 17,000 in 2004 to more than 1.6 million at the end of 2007, according to Pyramid Research . Pyramid's October 2008 subscriber data contains a forecast that puts the U.S. as having more than 10.4 million IPTV subscribers by the end of 2011, with nearly 60 percent of those connecting to the service via fiber-to-the-home.

Now comes the but. Although the U.S. has clearly passed the initial technology hurdle and is probably getting close to the end of the early-adopter phase, the country is still at a point where the number of subscribers is very small compared to those for traditional forms of video delivery -- over the air, cable, or satellite.

“The general consumer today has a couple of choices for pretty good video content delivery,” says David Foote, chief technology officer for GPON vendor Hitachi Telecom (USA) Inc. “IP video itself does not yet provide a compelling reason to switch away from traditional satellite or cable TV, for example. But you can see on the horizon some compelling potential reasons to do so eventually.”

This gets to the root of the problem. The U.S. pay-TV market is served by a very mature cable industry, as well as a robust satellite industry -- and, of course, there are over-the-air TV broadcasting and upcoming alternatives such as Over The Top (OTT) Web/Internet video services, too, as the following video discusses:

The established cable and satellite players have highly honed strategies for customer retention, and the cable operators have been very aggressive in building triple-play TV/video, broadband, and VoIP bundles that have gone down well. So there is currently a strong element of me-too in the telcos’ IPTV as they try to get a foot in the consumer’s door. That reality has led to unprecedented price competition, as discussed in the following video, which recaps a recent Heavy Reading consumer survey:

What will really count for the telcos is whether (and, if so, how quickly) they can reach the tantalizing things on the IPTV horizon, and whether they turn out to be a mirage or not. As Light Reading’s sister site Cable Digital News recently pointed out, there’s quite a list of issues that could take some of the shine off telco IPTV, and this report looks at a few more. (See Top Five Telco TV Threats .)

So it’s still too early to judge whether IPTV is going to be a success or not, although, clearly, the early technical hurdles have been overcome and it most definitely works. The question now is: Where does IPTV go from here?

Here’s a hyperlinked contents list:

  • Page 2: What’s IPTV?

  • Page 3: US IPTV Now

  • Page 4: Next-Generation TV

  • Page 5: What’s the Point?

  • Page 6: Evolving IPTV: Systems Technology

  • Page 7: Evolving IPTV: Quality of Experience

  • Page 8: Evolving IPTV: In-Home Distribution

  • Page 9: Evolving IPTV: Add Value...

  • Page 10: ... And More Value

    — Tim Hills is a freelance telecommunications writer and journalist. He's a regular author of Light Reading reports.

    Next Page: What’s IPTV?

    (1)  | 
    Comment  | 
    Print  | 
  • Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
    User Rank: Light Beer
    12/5/2012 | 3:25:34 PM
    re: IPTV in the USA
    I heard that Fairpoint was using Cisco's IPTV middleware in Plymouth. I think they have 10 IPTV middleware customers now. Can some one confirm it.
    Featured Video
    From The Founder
    The 'gleaming city on a hill,' Steve Saunders calls it. But who is going to take us from today's NFV componentry to the grand future of a self-driving network? Here's a look at the vendors hoping to make it happen.
    Flash Poll
    Upcoming Live Events
    September 28, 2017, Denver, CO
    October 18, 2017, Colorado Convention Center - Denver, CO
    November 1, 2017, The Royal Garden Hotel
    November 1, 2017, The Montcalm Marble Arch
    November 2, 2017, 8 Northumberland Avenue, London, UK
    November 2, 2017, 8 Northumberland Avenue – London
    November 10, 2017, The Westin Times Square, New York, NY
    November 30, 2017, The Westin Times Square
    All Upcoming Live Events
    With the mobile ecosystem becoming increasingly vulnerable to security threats, AdaptiveMobile has laid out some of the key considerations for the wireless community.
    Hot Topics
    Could 5G Have Found Its Glass Ceiling?
    Dan Jones, Mobile Editor, 9/20/2017
    1 Million Pirate Set-Top Boxes Sold in the UK
    Aditya Kishore, Practice Leader, Video Transformation, Telco Transformation, 9/20/2017
    Comcast Shuts Down OTT Again
    Mari Silbey, Senior Editor, Cable/Video, 9/19/2017
    Why Amazon May Be Cable's Biggest Threat
    Mari Silbey, Senior Editor, Cable/Video, 9/22/2017
    Photo Highlights: Operations Transformation Forum 2017
    Ray Le Maistre, International Group Editor, 9/17/2017
    Animals with Phones
    Live Digital Audio

    Understanding the full experience of women in technology requires starting at the collegiate level (or sooner) and studying the technologies women are involved with, company cultures they're part of and personal experiences of individuals.

    During this WiC radio show, we will talk with Nicole Engelbert, the director of Research & Analysis for Ovum Technology and a 23-year telecom industry veteran, about her experiences and perspectives on women in tech. Engelbert covers infrastructure, applications and industries for Ovum, but she is also involved in the research firm's higher education team and has helped colleges and universities globally leverage technology as a strategy for improving recruitment, retention and graduation performance.

    She will share her unique insight into the collegiate level, where women pursuing engineering and STEM-related degrees is dwindling. Engelbert will also reveal new, original Ovum research on the topics of artificial intelligence, the Internet of Things, security and augmented reality, as well as discuss what each of those technologies might mean for women in our field. As always, we'll also leave plenty of time to answer all your questions live on the air and chat board.

    Like Us on Facebook
    Twitter Feed