Cable Technology Feature Article
IPTV Forecasted to Take Over Cable TV
By Rachel Ramsey, TMCnet Web Editor
The Internet has come a long way since its inception, with advancements, improvements and innovations happening every day. From the transformation of smartphones to the dominance of social media, the Internet has changed the way we communicate. Now, the Internet is changing the way we watch TV with the emergence of Internet protocol television (IPTV (News - Alert)).
The concept of IPTV is similar to VoIP; the service is delivered through the Internet using a special protocol which is separate from your normal Internet usage. By using the Internet, IPTV allows for much more flexibility and interactivity.
Infonetics (News - Alert) Research’s recent November 2012 Pay TV Services and Subscribers report predicts that by 2016, satellite TV revenue will overtake cable TV revenue for the first time. The report forecasts and analyzes the telco IPTV, cable video and satellite video services market.
The global pay-TV market (cable, satellite and telco IPTV) totaled $137 billion in the first half of 2012 (1H12), a 9.4-percent increase over the same time last year. Global pay-TV service revenue is forecast by Infonetics to grow at a seven percent CAGR from 2011 to 2016, spurred by emerging markets India, Brazil, Argentina, Mexico, Russia and China.
Latin America, the smallest but fastest-growing pay-TV market, is on track to jump by 23 percent this year to top $23 billion. The number of global pay-TV subscribers will reach 719 million in 2012, up by six percent from 2011.
While cable subscribers continue to make up the lion’s share (60 percent in the first half of the year) of pay-TV subscribers, growth is strongest in the telco IPTV segment, up by 19 percent in the first half of this year over the second half of last year.
Jeff Heynen, Infonetics Research (News - Alert) directing analyst for broadband access, pay TV, said in a statement, “Ongoing challenging economic conditions in the key revenue-generating markets of North America and Western Europe have resulted in slowing subscriber and revenue growth in the cable TV market.”
Subscribers are far less loyal than they used to be. The cable TV industry is characterized more by churn than cord cutting, as subscribers take advantage of introductory pricing on satellite and IPTV subscriptions that’s 30-50 percent below their cable bills.
“DirecTV (News - Alert), Verizon, AT&T and Virgin Media have all set their sights on existing cable subscribers, and they’re seeing their subscriber bases increase as cable TV subscriptions shrink,” Heynen said.
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Edited by Brooke Neuman