Regulations and customer understanding are the two biggest barriers to the success of IPTV (Internet Protocol television), say operators, content providers and vendors that participated in a survey done by the Economist Intelligence Unit Ltd. and Accenture Ltd.
Even though they vary widely by region, regulations present the largest worry in the IPTV market, according to the study released on Thursday that surveyed 300 executives around the world.
The net neutrality debate in the U.S. and regulations that bar telecommunications operators from offering IPTV in some Asia-Pacific countries could slow down the deployment of services, said Ray Dogra, global IPTV lead at Accenture.
Operators around the world are testing and in some cases commercially offering television programming delivered over broadband connections, a service known as IPTV. The technology allows companies like telecommunications operators to enter the television market and enables services such as video on demand.
Customer understanding, standardization issues and marketing and pricing also ranked high among areas of concern in the IPTV survey. Accenture’s Dogra, however, noted that marketing and pricing “are things that should be in an operator’s control to influence the adoption curve.”
One aspect that didn’t appear on the list of concerns was technology, indicating that the IPTV market is generally confident that the technology behind IPTV is developed and ready, he said.
The study’s respondents said that drivers for deploying IPTV include developing new revenue streams, growing the number of broadband users, reducing customer turnover and acquiring new subscribers. Typically, operators rank reducing churn and increasing broadband subscriptions as the top reasons for offering IPTV, Dogra said. The results show that the industry is growing more confident in using IPTV to drive revenue, he said.
Video-on-demand, integrated services and gaming will create the new revenue streams, the survey found. Advertising ranked quite low on the list of sources that respondents identified for potential revenue from IPTV. That may indicate that the market is viewing advertising from a broadcaster point of view, Dogra said.
Broadcast advertising revenue worldwide has been declining while Web-based advertising has significantly grown, he said. “IPTV has the opportunity to have the richness and impact of TV and merge that with the targeting capabilities on the Web to find some smart ways to monetize advertising,” he said.
The survey also found that the respondents expect that IPTV will begin to generate significant revenue in three years.