Executive Summary

This latest forecast is an update to the IP TV Global Forecast – 2005 to 2009 dated September 2005. It incorporates the most recent information on IP TV deployments, including:

• The current and planned deployments of IP TV services by large carriers in Europe.
• The current and planned IP TV deployments by competitive and smaller carriers in Europe.
• The current state of IP TV deployments at AT&T, BellSouth, and Verizon in the U.S.
• The initiation of IP TV trials in China and India that indicate very large future IP TV deployments.
• The success of a number of early IP TV deployments in Canada, Europe, and Asia.

We are forecasting that the number of DSL subscribers will grow from 97 million in 2004 to 256 million in 2009, a compounded annual growth rate of 21 percent. These DSL subscribers are the base for the IP TV subscribers shown in Figure 1-1.

Figure 1-1: Global IP TV Subscriber Forecast
Source: MRG, Inc.

Figure 1-1 shows that the number of global IP TV subscribers will grow from 4.3 million in 2005 to 36.8 million in 2009, a compound annual growth rate of 72 percent.

Europe is leading the market and has higher subscriber numbers than the previous forecast. Both Asia and North America have slipped a bit. Some service providers in Asia are having difficulty with marketing the service and we have tempered our enthusiasm for China a bit. The forecast for North America decreased due to a slower than expected rate of fiber deployment, especially with AT&T.

Figure 1-3: Global IP TV System Revenue Forecast
Source: MRG, Inc.

Figure 1-3 shows that the forecast for global IP TV system revenue will grow from $740 million in 2005 to $4.3 billion in 2009, a compound annual growth rate of 56 percent. The Set-top Boxes and the Access Systems together account for 68 percent of the total spending over the forecast period. The other four product categories account for 34 percent of the total.

The forecast shows that the market for IP TV services and equipment will be a strong one with strong opportunities in Europe, Asia, and North America. We expect growth to continue. In addition, the opportunity in the Rest of the World is becoming significant.

This report is part of the IP TV Tracking Service published by the Multimedia Research Group, Inc.

1 Executive Summary

2 Global Outlook for IP TV
2.1       Europe Continuing to Move Forward
2.1.1       France Is Very Competitive
2.1.2       Telecom Enters Italian Market
2.1.3       Benelux Countries
2.1.4       IP TV Starting in Germany and the UK
2.1.5       Other Western European Countries
2.1.6       IP TV Progressing in Eastern Europe
2.2       Asia Depends on China and India
2.2.1       IP TV Will Dominate in Hong Kong
2.2.2       Taiwan Starting to Move Foreward
2.2.3       Japan Facing Marketing Issues
2.2.4       Korea Will Start IP TV in 2006
2.2.5       China Trailing in Mass
2.2.6       IP TV Starting in India
2.2.7       Activities in Other Asian Countries
2.3      The Major U.S. Incumbents Pushing IP TV
2.3.1       Large U.S. Incumbents are Starting IP TV Activities
2.3.2       Canadian Telcos Adopting IP TV
2.3.3       Smalll U.S. Independent Telcos Continuing their Advance
2.4       IP TV Emerging in the Rest of the World

3 Global IP TV Market Forecast
3.1       Methodology
3.1.1       DSL Forecast
3.1.2       IP TV Subscribers and Revenue
3.1.3       Access System Revenue
3.1.4       Video Headend System Revenue
3.1.5       Video On Demand Servers
3.1.6       Set-top Box Revenue
3.1.7       Middleware Software Revenue
3.1.8       Content Protection/Digital Rights Management Software Revenue
3.1.9       System Integration and Professional Services Revenue
3.2       Global Forecast Shows Strong Growth
3.2.1       Global DSL Forecast Shows a Big Increase
3.2.2       IP TV Subscribers Forecast Remains Firm
3.2.3       Global System Revenue Forecast
3.2.4       Global Access System Revenue Forecast
3.2.5       Global Set-top Box Revenue Forecast
3.2.6       Global IP TV Headend Revenue Forecast
3.2.7       Global IP Video On Demand Revenue Forecast
3.2.8       Global IP TV Middleware Revenue Forecast
3.2.9       Global IP TV Content Protection Revenue Forecast
3.2.10     Global IP TV System Integration Revenue Forecast
3.3       IP TV Market Forecast for Europe
3.3.1       DSL Subscriber Forecast for Europe
3.3.2       IP TV Subscriber Forecast for Europe
3.3.3       IP TV System Revenue for Europe
3.4       IP TV Market Forecast for Asia
3.4.1       DSL Subscriber Forecast for Asia
3.4.2       IP TV Subscriber Forecast for Asia
3.4.3       IP TV System Revenue for Asia
3.5       IP TV Market Forecast for North America
3.5.1       DSL Subscriber Forecast for North America
3.5.2       IP TV Subscriber Forecast for North America
3.5.3       IP TV System Revenue for North America
3.6       IP TV Market Forecast for the Rest of the World
3.6.1       DSL Subscriber Forecast for the Rest of the World
3.6.2       IP TV Subscriber Forecast for the Rest of the World
3.6.3       IP TV System Revenue for the Rest of the World

4 Opportunities, Risks, and Recommendations
4.1       Opportunities
4.2       Risks
4.3       Recommendations

Table of Figures

Figure 1-1: Global IP TV Subscriber Forecast
Figure 1-2: Global IP TV Service Revenue Forecast
Figure 1-3: Global IP TV System Revenue Forecast
Figure 3-1: Global DSL Subscriber Forecast
Figure 3-2: Global IP TV Subscriber Forecast
Figure 3-3: Global IP TV Service Revenue Forecast
Figure 3-4: Global IP TV System Revenue Forecast
Figure 3-5: Global IP TV Access System Revenue Forecast
Figure 3-6: Global Forecast for IP TV Set-top Boxes
Figure 3-7: Global Forecast for IP TV Set-top Boxes by Technology
Figure 3-8: Global IP TV Video Headend Revenue
Figure 3-9: Global IP TV Video Headend Revenue by Technology
Figure 3-10: Global IP TV Video On Demand Server Revenue
Figure 3-11: Global IP TV Middleware Revenue Forecast
Figure 3-12: Global IP TV Content Protection Forecast
Figure 3-13: Global System Integration and Professional Services Revenue
Figure 3-14: DSL Subscriber Forecast for Europe
Figure 3-15: IP TV Subscriber Forecast for Europe
Figure 3-16: IP TV Subscriber Revenue Forecast for Europe
Figure 3-17: IP TV System Revenue Forecast for Europe
Figure 3-18: Asian DSL Subscriber Market
Figure 3-19: Asian IP TV Subscriber Forecast
Figure 3-20: Asian IP TV Subscriber Revenue
Figure 3-21: IP TV System Revenue for Asia
Figure 3-22: DSL Subscribers Forecast for North America
Figure 3-23: IP TV Subscriber Forecast for North America
Figure 3-24: IP TV Subscriber Revenue Forecast for North America
Figure 3-25: IP TV System Revenue for North America
Figure 3-26: DSL Subscriber Forecast for the Rest of the World
Figure 3-27: IP TV Subscriber Forecast for the Rest of the World
Figure 3-28: IP TV System Revenue for the Rest of the World

Table of Tables

Table 2-1: Global IP TV Subscriber Providers
Table 3-1: IP TV Service Subscriber Monthly Pricing Assumptions
Table 3-2: IP TV Access System Per Port Pricing Assumptions
Table 3-3: IP TV Video System Per Encoder Pricing Assumptions
Table 3-4: Video On Demand Per Stream Pricing Assumptions
Table 3-5: Set-top Box Pricing Assumptions
Table 3-6: Set-tp Boxes Per home
Table 3-7: Middleware Pricing Assumptions
Table 3-8: Content Protection/Digital Rights Management Price Per Subscriber
Table 3-9: System Integration/Professional Services Rates
Table 3-10: Leading Service Providers Globally
Table 3-11: Global Service Provider IP TV System Spending: 2005-2009
Table 3-12: Leading Service Providers in Europe
Table 3-13: Service Provder IP TV System Spending in Europe: 2005-2009
Table 3-14: Leading Service Proivders in Asia
Table 3-15: Service Provider IP TV System Spending in Asia: 2005-2009
Table 3-16: Leading Service Providers in North America
Table 3-17: Sevice Provider IP TV System Spending in North America: 2005-2009