Importance of IPTV, video services grows among service providers, says study

A growing number of North American, European and Asia-Pacific service providers are betting on IPTV and video services to gain a competitive advantage, according to a new study from Infonetics Research.

The report, “Service Provider Plans for IPTV and Video,” says the loss of revenue associated with fixed-line telephony services to cable operators and other competitors, along with the threats to revenue posed by over-the top Internet content providers (ICPs), are forcing service providers to move into the TV business to increase ARPU, reduce churn and expand their brands beyond the monolithic telephone company.

Further fueling the drive to IPTV and video is the fact that service providers now have more access options over which to deliver high bandwidth, high revenue IPTV and video services to subscribers, including previously expensive access technologies that are now available at comparable prices from multiple manufacturers. This includes DSL, PON, Ethernet FTTH (active Ethernet), cable HFC and WiMAX.

The report finds:

  • The top technical challenge IPTV and IP video service providers face is interoperability between products.
  • Implementing interactive video features is the second highest rated technical challenge, as providers move away from their legacy linear model and adopt interactive advertising and online gaming as differentiators.
  • The percent of service providers offering interactive advertising will grow from 20 percent today to 70 percent in 2009.
  • Ensuring QoE remains the most critical aspect to any operator's IPTV service.
  • 30 percent of respondents use a hybrid solution, combining digital terrestrial (DTT) or satellite delivery of broadcast programming and multicast delivery of premium and VOD content.

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