BBC Monitoring Media
Analysis by Steve Metcalf of BBC Monitoring at the International Broadcasting Convention in Amsterdam on 10 September
One of the "hot topics" at this year's IBC trade gathering in Amsterdam was IPTV internet protocol television.
Some people within the broadcasting industry were predicting that IPTV would be the next big thing after high-definition TV. Others, however, were not so certain.
A recent survey by Accenture consultants found widespread confusion and "even a complete lack of awareness" over what IPTV actually is. Even those people who were aware of it disagreed over how to define it.
The Accenture report defined IPTV as "the delivery of broadcast- quality digital television and other services over a broadband network using internet technology".
On-demand services
In simple terms, it could be described as TV signals coming down your phone line. But you won't necessarily have to watch them on your computer screen.
And, depending on your provider, you will be able to call up programmes you have missed or search a broadcaster's archive for films, documentaries and so on.
Other features could include music and video on demand, email and chat services, and general internet access.
Research has shown that there is a great potential demand for the type of services that IPTV can offer, in particular because of their flexibility and interactivity.
But at the same time consumers are worried about a number of issues, such as the reliability of the connection, possible virus attack, ease of use and cost.
Next-generation TV
Former state-run telecommunications companies (telcos) in a number of European countries are taking the lead in offering IPTV services.
In the UK, BT has announced plans for a service that combines on- demand content with access to digital terrestrial TV channels.
What BT calls "next generation TV" will have access to content supplied by BBC Worldwide, Paramount and Warner Music. In addition it will have "catch-up TV" regular programmes from the last seven days available on demand and interactivity in the form of games and shopping.
This last feature is one that gives IPTV a potential edge over traditional broadcasters. But industry observers point out that telcos face several challenges ahead.
Challenges
They have one advantage, in that they have already begun establishing broadband networks for their existing telephone customers, and in their role as internet service providers.
But will this have enough bandwidth, i.e. be robust enough, to deliver services such as HDTV without interruption or freezing? And will it be able to cope with future advances, such as the forthcoming MPEG-4 format?
Also, telcos have until now basically been "pipe operators", delivering a connection to the home. In the future they will have to be much more than that.
They will have to provide, and probably install, the set-top boxes that provide the service. They will have to trouble-shoot any problem the customer experiences. And they will have to provide the content.
They could do this through third-party suppliers, a joint venture with cable and satellite operators, or they could go for direct content acquisition from film studios and other sources.
Growth forecasts
Some commentators see the telcos' push into IPTV as a defensive response to the challenge from cable television operators in particular.
According to Datamonitor, IPTV is likely to remain "a relatively niche proposition" across much of Europe in the next few years. It forecasts that there will be 9.5m IPTV subscribers across the region by the end of 2010, which is less than 10 per cent of digital households.
France will account for around 28 per cent of that figure. This is because market conditions make it an attractive market for IPTV, says Datamonitor.
Cable penetration there is relatively low and there are strict conditions surrounding the installation of satellite dishes. Lack of cable and satellite penetration in eastern Europe has also led a number of analysts to pick that region as ripe for IPTV take up.
Revenue potential
Asia has also been singled out as a potential growth area, with Hong Kong leading the way.
However, in countries such as Japan and South Korea, two leading broadband nations, IPTV has not yet been introduced. This is because existing regulations are unclear as to whether IPTV comes under the internet service or broadcast service category.
In the USA, market research firm eMarketer projects that in 2010 there will be 8.7m IPTV households, up from 300,000 in 2005.
But Ben Macklin, senior analyst at eMarketer, thinks that IPTV has limited revenue potential. In countries such the USA and UK, which already have high multichannel TV penetration, he thinks that IPTV "is unlikely to offer anything new that existing subscribers of cable or satellite TV services do not already receive".
"In countries such as Spain, Italy, France and Hong Kong, the leading broadband access providers are utilizing IPTV as an aggressive play to move into underserved pay-TV markets," says Macklin. "IPTV has genuine revenue potential in these markets rather than merely being a churn reducer."
(c) 2006 BBC Monitoring Media. Provided by ProQuest Information and Learning. All rights Reserved.
