The Standard for Home Entertainment Networks over Coax™
A traditional service provider, whether it is a telco, cable MSO or satellite (DBS) company, is no longer bounded by its core segment or original purpose. These service providers are quickly morphing into comprehensive purveyors of Triple and Quad Play services for telephony (landline and cellular), Internet access and video and digital television.
As Charles Hall of Rider Research and publisher of the Online Reporter has suggested recently, the term digital service provider perhaps more accurately reflects this evolutionary process. For the telco segment of the broadband industry, the emerging route to delivery of television and video services is via IPTV (Internet Protocol television).
Indeed, most global telcos are making enormous strides in capturing market share of the video delivery business that has been the well-kept province of cable MSOs and DBS providers. The entrance of telcos into the digital TV and VOD market has caused the industry to question the standard definition of the term IPTV.
Presently there is no one accepted industry accepted meaning. Is IPTV now a market as well as acapability? Are IPTV services strictly the domain of the telco or is it of relevance to the cable MSO community as well? This paper will attempt to re-define the term IPTV while providing both an explanation and discussion of whatwe believe is the best IPTV environment for digital service providers.
For purposes of this paper, IPTV is defined as a means of delivering enhanced video applications over a managed or dedicated network via Internet Protocol to the TV through a broadband connection. IPTV is not video over the public Internet.
IPTV is often misconstrued for lack of clear definition. Let’s look at what IPTV is not:
– IPTV is not video over the public Internet. Because the public internet is actually composed of several independent networks with separate controls, it is NOT a managed network. For this reason, it is not really capable of delivering multiple streams of high definition video in the manner subscribers now expect from a service provider
– IPTV is not video compression (MPEG-2, MPEG-4, MPEG-4 Part 10, VC-1, AVC, JVT, H.264, etc.)
– IPTV is not video services
– IPTV should not be confused with the term “All Digital” which can apply to MSO and DBS services IPTV is not DOCSIS (although DOCSIS incorporates IP)
– IPTV isn’t necessarily “better”, “cheaper” or “newer” (although some IP set-tops are cheaper)
According to ABI Research, networking capabilities will be embed in all manner of consumer electronic devices as the demand for digital content sharing, IPTV, HDTV, social networking and other services delivered over an IP-based connection continues.
ABI also believes that TVs and DVD players will become the hub of this new connected network within a home network. The firm forecasts the number of networked TV shipments alone to grow to 65 million total units sold by 2012, a significant step up from the 3.6 million units sold in 2008 (“Television Integrating with Home IP Networks,” Digital Lifescapes, March 31, 2008).
While ABI’s numbers are bandied about and discussed within the industry, other projections differ based on the industry’s inability to succinctly define IPTV as capability or market. Still overall trends among consumers and other data points indicate an upwardly growing market and capability set.
For instance, in the U.S. alone, IPTV revenues are projected to reach $13.7 billion by 2012 (Strategy Analytics, “U.S. IPTV Forecast and Outlook, Broadband magazine, May 2008 issue, page 10).
Worldwide IPTV revenues will exceed $42.6 billion by 2014, according to Global Industry Analysts.
Infonetics forecasts worldwide IPTV equipment revenue to go from 1 billion in 2006 to 5.5 billion in 2010.
Worldwide set top box unit shipments to go from $4million in 2006 to 17 million in 2011, per Strategy Analytics.
Yankee Group projects IPTV subscribers worldwide to exceed 248 million by 2014.
The worldwide IPTV equipment market grew 47% year over year in 2007, according to a report from Synergy Research Group.
Shipments of IP STBs will grow at a CAGR of 37.1 per cent through 2012 (IMS Research IPTV: A Global Market Analysis - 2008 Edition).
Multimedia Research Group forecasts IPTV subscribers growing from 24.4 million to 92.8 million from 2008-2012, and service revenue totaling $37.1 billion by 2012.