Will IPTV Ever Be Viable?

by Alan Harten

‘IPTV Business Models: Profit and Loss in the Telco TV Space’ is the title of a new report from media analysts Screen Digest.

It delves into the future for IPTV in 26 European States.

They see a mad scramble by providers to differentiate themselves from their competitors.

Despite its early promise of a big reduction in churn in the broadband market, IPTV has failed to cover its start up costs, it has had virtually no effect on churn and its effects on the broadband market are negligible.

Despite this seeming no win situation telcos are pressing ahead with IPTV and estimate that there will be 22 million subscribers by 2012.

Areas with high amounts of cable infrastructure have seen IPTV side benefits of overall growth in the market, enabling equal competition with cable triple-play operations.

The study concludes that France, Italy and the UK are doing very poorly, as pay TV is not popular with consumers, so they are even less inclined to opt for yet another pay-TV option.

The survey wonders if some markets will ever become viable, with even less possibility of making a reasonable profit.

They see IPTV not as an advantage, but rather a way that some companies would be at less of a disadvantage.

The only option Screen Digest sees for many providers is to offer bigger more exiting content packages.

Screen Digest see charges of less than €8 a month as untenable and point to BT who recently launched a BT Vision HD push-video-on-demand (pVoD) package in that range, that Screen Digest consider on the very edge of viable.

They say that IPTV needs to tread a more traditional path, bidding on big time sports events to lock in viewers.

Sky TV for example, was in the doldrums in the mid-eighties with no real consumer uptake. The spark that lit the fire was the Tyson- Bruno fight that saw subscriptions sky-rocket.

They believe that adding an incentive here and a special option and a bit of clever tech will not win over subscribers, especially as many competing systems can hit back with similar offerings.

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