07.23.2008 12:00 AM
IPTV providers need to drive uptake of pay-per-view and VoD
Sustaining pay-TV and VoD growth is one of the key challenges for IPTV providers, a new report from Gartner says.

Although one in four consumers have used pay-per-view (PPV) or VoD content in the last year, getting more consumers to order and then regularly view this type of content is something operators need to devote more attention to.

The Gartner survey — 5,800 consumers across 18 territories — showed that although 25 percent of consumers had some kind of pay-TV service available in their household, less than 25 percent had made use of it in the last year.

The Gartner research indicates that globally, the average consumer spends 22 hours per week viewing entertainment on the television set; of which 16 hours per week is spent watching TV and six hours watching DVDs or videotapes. In addition, 39 percent of those surveyed had downloaded some form of video content (such as moves, TV shows and video clips) in the past three months.

According to the analyst firm, tapping into this established behavior and providing alternate solutions to satisfy demand is essential in earning incremental revenue for IPTV.

"Consumers already value DVD and videotape purchases and rentals, so getting them to transfer this behavior or habit over to IPTV subscriptions is a key strategy in developing revenue," said Amanda Sabia, principle research analyst at Gartner. "Providers need to ensure that ordering and navigation processes for PPV and VoD are easy to understand and user friendly. They should also offer competitive pricing, free trials and a wide range of titles, making sure they include various unique and most-recent versions."

Providers need to be creative in new business models, such as 'pay per day' and 'pre-paid on-demand' options, alongside aggressively marketing PPV and VoD libraries, Gartner advocates.

"As competitive pressures in the consumer communications market continue to drive telephone companies to expand their suite of services to include broadcast television and video programming, telcos have to provide distinct services to convince subscribers to switch to their products," Sabia added. "Differentiated content is a major lever for new IPTV providers to win customers."

Based on its research, Gartner has forecasts that the top five global markets for PPV or VOD — based on the combined highest access and content scores — are likely to be China, United States, Canada, Germany and South Korea.

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