|
IPTV Looking Robust, Wards Off Expected Nosedive
IPTV remains strong with 35 new deployments in the past six months, according to MRG's Market Leader report
More than 35 new IPTV operations began trials or deployment across the globe in the past six months, suggesting opportunity in the market despite the economic downturn and rise of alternative options for video. Only two trials took place in North America, with the majority occurring in emerging markets, but the US has done better than originally expected, according to Gary Schultz, chief executive officer of analyst firm Multimedia Research Group.
MRG actually had to increase its forecast for global IPTV subscriber growth, which it had lowered back in August when it last published the standings, Schultz said. Growth rates aren’t quite what they were a year ago, but they are still steady and respectable worldwide, he said.
“We think the telecom industry in general paid its major dues back in the last dot-com bust,” Schultz said. “The telcos themselves know how to pull in their belts quickly and keep their cap ex spending up. AT&T is an example. We were surprised they are keeping their cap ex budget around $18 billion. That doesn’t sound like an austerity budget to me. They will continue to build out. In general, we are pleasantly surprised that the industry has not taken a nosedive south.”
MRG this week released its March global IPTV market leaders report, which tracks the top 100 global vendors serving more than 700 IPTV service providers. The company concluded that subscriber growth is continuing, as reflected by increased deployments of IPTV products throughout the world.
MIDDLEWARE MARKET REMAINS CROWDED
Microsoft Mediaroom, AT&T’s middleware of choice, moved up in the global middleware and content protection rankings to second place, and captured the first place spot in video on-demand, where 16 other vendors compete. Each of the top 10 vendors had well over 1 million subscribers, according to MRG. Schultz said that this level of competition makes IPTV is more reflective of the mobile phone industry than ‘your father’s cable system.’
Middleware, a historically crowded market that many analysts expected to winnow to a few strong players, continues to be competitive with more than 22 companies vying for space. The big players – Microsoft, Alcatel Lucent, Ericsson, Thompson and Nokia Siemens – continue to dominant, but the smaller players are finding their niches or growing larger through acquisitions and mergers. Schulz said there won’t be just two huge middleware players like in the past. It is such an important market that players are in it for the marathon, not just the 100-yard dash.
“There are so many operators there that are really small, but they are hanging in there,” Schultz said. “We still think you’ll see a fair amount of [mergers and acquisitions] in the next 12 months. The economy helps the case for M&A because it drives down the price of the acquiree. I’m a little surprised we haven’t seen more in the last six months.”
SET-TOP BOXES MARKET HEALTHY, HYBRID
Likewise, set-top boxes (STBs) are an equally crowded market, with the top eight suppliers capturing more than 1 million subscribers. Motorola and Amino, following its acquisition of hybrid STB provider Tilgin, are leaders here. Still, despite expectations that the market would peak in the next few years, Schultz said there is room for multiple, regional players.
“The reason STB is different is it’s perceived by a lot of local and state economies as a creator of jobs,” Schultz said. “It’s a little bit like the cell phone business was in the case where you have hundreds of varieties of cell phones out there globally and many of those are manufactured locally. Why isn’t there a world standard? A lot of local jurisdictions don’t want it that way. They want their own version for competitive reasons and also because it keeps their business local.”
In many of the IPTV deployments in the past six months, telcos took on the hybrid approach rather than launching full-blown IPTV systems, but this is still more common in Europe, which has been more aggressive in converting analog subscribers over to digital terrestrial. Shultz said in many of these cases, it made more sense for a local telco to go hybrid rather than try to carry all the broadcast channels through their network. The most sophisticated example that North American telcos can learn from, he said, comes from British Telecom, which has digital terrestrial channels and uses IPTV for its on-demand component.
“It will apply to the North American market, particularly in tier twos in rural areas where there still needs to be a faster and cheaper way to get to market,” Schultz said. “The operators can save a lot of cap ex on the headend. We think you will see replacement models for IP-Prime, which SES Americom was pushing, and we think you’ll see some other sources for those kinds of services develop. The rural US market can go with a hybrid solution.”
FairPoint to test two-way high-def IPTV
PORTSMOUTH – FairPoint Communications next month will hand out 100 high-definition televisions and wire the sets into an existing fiber-optic cable network in Portsmouth to test a two-way television service that has Web-like capabilities.
IPTV was developed around a decade ago, but has been slow to advance as an alternative to antenna, cable or satellite television. AT&T released an IPTV service in 2006 called U-Verse that integrated television with Web-like features, TiVo-like recording and Video on Demand.
U-Verse now has 781,000 subscribers -- its closest available service is in Connecticut -- and enables users to check weather, traffic and stocks, look up Yellow Pages listings, or look at Flickr pictures on the TV screen, said AT&T spokesman Destiny Varghese.
Carriers already bundle IPTV, Voice-over-Internet telephone and Internet access into packages -- the so-called "triple play" package -- and possibilities exist for full integration into an interactive television environment, said Gary Schultz, an industry analyst, president of Multimedia Research Group Inc.
The alignment of television and video with Internet and phone IP applications poses the potential for connecting TVs to the World Wide Web and connecting content to mobile devices such as smart phones, he said.
"Experiments are ... all over the place," Schultz said. "Integration of multimedia services aligns services and could enable Web functions like search, recommendation engines for shows you might like, or teleconferencing, which has been well demonstrated, on your TV."
Schultz said his firm is tracking 300 small companies that are currently tinkering with technology systems for such capabilities.
Click here for complete article.
Growing Demand for IPTV
According to figures published by the Multimedia Research Group Inc., in April 2008, the number of subscribers to IPTV worldwide will grow from 24 million in 2008 to 92.8 million in 2012, a compound annual growth rate of 31 per cent (Figure 1). Figure 2 shows that global revenues from IPTV services are expected to rise from USD 7.2 billion in 2008 to USD 31.6 billion in 2012, representing a compound annual growth rate of 34.5 per cent.
Figure 1 —
Forecast of Global IPTV Subscribers |
Figure 2 —
Forecast of Global IPTV Service Revenues |
 |
 |
This article is the copyright of the International Telecommunication Union, and first appeared in “ITU News” magazine in October 2008.
Click here for complete article.
U.S. IPTV Operators Slow to Install
North America has the highest overall total average installation times for IPTV, coming in around 5.16 hours in-person, according to a study published this week of the top 60 operators in Asia, Europe and North America. The annual IPTV Home Networking Strategies report, written by Multimedia Research Group and distributed by Research and Markets, found that installations in the United States are above the overall average of 3.79 person-hours for installation from curb to the third set-top box (STB). For one STB homes, the average was 2.25 person-hours, with the total time increasing less than an hour for each additional STB.
Gary Schultz, principal analyst at Multimedia Group Research, said that the discrepancy in the U.S. can be attributed to the operator’s newness to the market compounded by customer’s desire to do more. While the North American install times are coming down, most operators are offering triple play services of voice, video and data or, at a minimum, a dual play of high-speed data and video, which adds to the overall install time.
“Another thing that increases the time is if you use wireline versus 802.11 or powerline, it is going to take you longer to set it up,” Schultz said. “Europe tends to use more powerline type networking, which means their install numbers are lower. Also, level of experience – how long have you been doing it? If you are an operator that’s just starting out, your times are going to be way up there. If you’ve been doing this for three to six years as a lot of these European and some Asian installations have been doing, that is going to be knocking your times down, because you’ll get a lot better at it.”
First place in installation speed went to Europe, with average times around 2.87 person-hours. Further, the most popular home networking technology claiming 34% of respondents was HomePNA, which also had the highest overall average installation times at 4.47 person-hours. The technology ties together both the AV and PC network so it tends to be more complex, which according to Schultz may actually be its biggest competitive advantage in the long run.
“The debate between lowering your OPEX and controlling the network from the perspective of the operator is an important strategic one,” he said. “If you install a basic network over which you as the operator have control, you can actually deliver quality of service to the end user where it is predictable and manageable and noticeable to the consumer. So, it is an investment that an operator makes that will and should payoff in terms of better quality, fewer customer service calls, improved loyalty by the customer, etc. So, keeping your initial OPEX down is a good goal to have, but you don’t want to be pennywise and pound-foolish when it comes to your long-term quality of service.”
Click here for complete article.
Total Telecom |
January 1 , 2008
Issue 58
By Hadass Geyfman
|
Satellites Collective Vision
HITS providers enable small telcos to scale costs according to subscriber and channel numbers
SATELLITE operators and content aggregators are enabling small telcos to compete head-on with pay-TV service providers by providing them with managed satellite IPTV solutions. The first target market has been US-based small telcos and rural cable companies, and now satellite players are seeking opportunities in other regions including South America and Asia.
In Europe, the market looks limited, but there could be an opportunity in markets with the right competitive conditions such as in Eastern Europe and the Balkans.
SES Americom launched the first commercial service, IP-Prime, last June. US company Eagle Broadband and France Telecom subsidiary GlobeCast struck a deal in 2005 to offer IPTVComplete, a managed service including headend facilities. So far it has signed up three customers in the US.
Content aggregators and satellite operators initially feared services would compete with their traditional customers, the direct-to-home (DTH) TV providers, but now they are aiming to increase their market share by turning potential competitors into customers. Driving the trend is telcos’ need to provide triple-play services through a cost-effective business model.
“IPTV infrastructure is based on an IP headend that requires heavy investment,” says Amit Karni, VP, sales, central and eastern Europe, at Spacecom. “It starts at $500,000 and can reach several million, depending on how many channels and advanced services the telco plans to provide. Small telcos, which don’t have a critical mass of subscribers, cannot get a return on this investment.”
Content, too, is a significant cost factor. “The telco must acquire channels and package them. This is costly, especially since small telcos have no negotiating power when dealing with large content providers,” says Meir Lehrer, VP of sales at NDS Americas, which provides conditional access solutions for content security. “Content aggregators and satellite operators are building centralised headends to make IPTV deployment faster and less costly. They set up a super headend that operates as a Headend-In-The-Sky (HITS) that performs the encoding, the IP encapsulation of content, encryption and other functions, and provide a turnkey project.”
HITS providers enable small telcos to scale costs according to subscriber and channel numbers, for example. “The HITS providers distribute the IPTV programming via satellite to the small telcos located within their beam-range,” says Karni at Spacecom. “The telco pays for its relative usage of the headend and the content, and invests only in a low-cost antenna to receive the signals and forward it to set-top boxes.”
As a result, tier-2 and tier-3 telcos, and rural cable companies, can more cost-effectively launch IPTV services.
“The primary target market for…HITS services are the IOCs [Independent Operating Companies],” says Lehrer. “They are tier-3 telcos in the US, each with up to 50,000 subscribers.”
In September 2005, SES Americom signed an alliance with the National Rural Telecommunications Cooperative (NRTC), which represents the interests of more than 1,300 IOCs, to offer its IP-Prime service. So far telcos Bek in North Dakota and Wky in Kentucky are already providing the service, and Planters in Georgia and Valley in Texas will begin providing commercial services in January.
Gary Schultz, principal analyst and president of Multimedia Research Group (MRG), points to the flexibility and speed to market of turnkey HITS solutions. “A typical HITS provider offers up to 300 channels. The telco can choose channels and pay accordingly. HITS services enable small telcos a quick deployment of IPTV while saving not only on capital expenditure but also on operational expenditure such as costs to train personnel.”
But HITS players still need to convince small telcos that they will not lose their independence. “Some of the IOCs are reluctant to leave all the decisions regarding equipment to the HITS provider,” says Sefy Ariely, VP of sales and marketing at Orca Interactive, a middleware solutions provider. “Plus, some of them prefer not being dependent on the HITS provider with no control over malfunctions.”
Several criteria would need to be met for HITS services to be deployed outside the US. “There are four conditions under which HITS services are financially worthwhile,” says one industry source. “The telco [must be] located in rural areas where equipment vendors have no motivation to deploy fibre; the telco [should have] a minimum of 500 subscribers and no more then a million subscribers on the same network; the relevant subscribers [must be able to] afford broadband and advanced TV services; and there [must be] at least 10 telcos receiving the service from the same beam.”
“We don’t see many small telcos outside the US,” says Roy Isacowitz, mobile TV marketing manager at NDS. “However, SES Astra in Luxembourg is examining the HITS opportunity. In China, the content aggregator CCTV is considering HITS among other models. China Telecom and China Netcom have about 50 subsidiaries in China’s 32 provinces [and] it makes sense for these subsidiaries to provide IPTV through HITS.”
Schultz at MRG points to South American content aggregator IPTV Americas which targets high-income subscribers. “It makes sense to provide this service through HITS, since deploying fibres in this region is highly challenging,” he says. Currently, it is providing services to telcos over fibre but is considering HITS for rural cable companies.
FTTH Network Positions Verizon to Climb to No. 1 IPTV Provider, says MRG
Multimedia Research Group’s (MRG) latest biannual global IPTV forecast revised upward its projection of the number of IPTV subscribers worldwide from 63.6 million in 2011 to 72.6 million because of growing optimism about success in China, India and Korea.
Closer to home, MRG has identified faster growth for Verizon and AT&T than previously forecasted and predicts Verizon will become the world’s largest IPTV service provider in 2011.
IPTV Update caught up with MRG president and founder Gary Schultz to discuss its latest forecast and some of the factors that went into reaching its conclusions.
IPTV Update: While Europe leads the pack in IPTV subscribers with Asia and the rest of the world moving up fast, MRG identifies Verizon in North America as being the world’s largest IPTV service provider in 2011. Why and what do you forecast for the number of FiOS TV subscribers by then?
Gary Schultz: Because they have made a commitment to fiber to the home. That in and of itself seems to be quite powerful as a platform for launching services. So we think that is going to be a very competitive offering.
They have a combination of RF and IP network right now — RF for all of the broadcast content and IP for the on-demand stuff. They have indicated they will go completely IP by 2010. Now, we’ll see if that happens, but my guess is that there’s going to be some real improvements, even in two-way services when they do that. They really have a commitment to be fiber to the home and to be 100Mb/s or whatever it happens to be, so I think because it’s a two-way network, it will deliver better quality than just an RF environment due to all of the QoS tools that come with the platform.
So we think they will have a competitive edge as time goes on. We don’t think the growth rate will continue on at a robust rate, although it will flatten a little.
As far as the number of subscribers in 2011, Verizon will have somewhere north of 5 million by then.
IPTV Update: What is MRG forecasting for IPTV subscribers in Europe, North America and Asia by 2011?
Gary Schultz: In Europe, we are looking at a little over 30 million, in Asia about 27.8 million and in North America about 11.7 million.
Sigma Rises After Earnings Beat Analysts' Estimates
Europe is the biggest market for Internet TV, said Len Feldman of Multimedia Research in San Jose, California. Three of the world's four biggest Internet TV operators are in France, he said.
Eventually, China and India will be the biggest Internet TV markets, Feldman said. China was home to 162 million Internet users at the end of June, making it the world's second-biggest Web market after the U.S., according to the China Network Information Center, a government-backed agency.
Sigma's revenue from Asia, including Internet TV products, was $50.9 million last quarter, 77 percent of the company's total. Europe yielded $12.3 million in sales, or 19 percent.
IPTV Facts That May Surprise You
France Is The Leader In IPTV, Apple TV Will Eclipse Netflix And TiVo – And Other Interesting IPTV Stats
In case you’re tired of hearing the usual statistics about how large the IPTV market will become, there are some interesting facts out there that may surprise you. Most of the innovation is not coming from the U.S., and the smallest markets may drive innovation in a way that no one could expect. But it’s important to note that plenty of innovation is coming from larger markets as well.
Len Feldman, director of IPTV analysis at Multimedia Research Group, provided some more interesting statistics from its upcoming Internet Video Report, part of their "IPTV Global Tracking Service:"
- France has the largest number of IPTV subscribers in the world, with three of the world's four largest IPTV service providers (Free, Orange France Telecom and Neuf Cegetel). The remaining service provider out of the top four is PCCW in Hong Kong.
- French IPTV subscribers typically pay less than $45 per month for a triple-play service with high-speed Internet, local and long-distance telephone and basic IPTV service. Similar packages in the U.S. typically go for upwards of $100 per month.
- Chinese IPTV subscribers typically pay the equivalent of $4 to $8 per month for video service.
Given all the growth overseas, it will be a while before the U.S. can truly compete on a global scale. Nevertheless, as more neighborhoods get wired up for IPTV services, it’s only a matter of time before true innovation begins stateside.
Get the Most Out of Joost
The Content Is Still A Little Thin, But Here's How To Get To The Good Stuff Out Of Joost
With the much-hyped online TV service Joost, (see Is IPTV Getting Joost?) having just opened up its beta launch, the number of invite requests is staggering, and the site infrastructure is close to having a meltdown. Aside from this, getting the most out of it depends on knowing what to look for and what’s available.
“At this point, it still requires an invitation to get Joost, but limitations on the number of invitations that users can send have been eliminated,” said Len Feldman, director of IPTV analysis at Multimedia Research Group. “A friend may already have Joost and can send an invitation. If not, go to Technorati (or any blog) and search for 'Joost'.
“It also has chat rooms that are linked to each channel -- when you watch a show and select 'My Joost,' you automatically enter the chat room for that channel,” said Feldman. “There's also an IM client built into the software that works with Jabber and Gmail accounts, and a variety of other widgets, including a configurable news ticker and a rating tool (0 to 5 stars).”
“There doesn't appear to be any way to connect it to MySpace sites, nor is there a way (for now) to watch it on a conventional TV set, although we expect to see both capabilities in the near future,” he added.
IPTV: It's All About the Quality
Quality Of Service Is A Big Differentiator Among IPTV Service Providers - The Tricky Thing Is How To Measure It
IPTV services have high standards to meet before they’re even launched, both in terms of quality of programming and the technology required to deliver it. Maximized Quality of Service (QoS) will be a major differentiator in the years ahead, but necessary if these services want even a chance to succeed.
Expanding on the technical aspects and challenges involved, Steven Hawley, senior analyst at Multimedia Research Group, explained that "A discussion of 'QoS' in an IPTV context is actually three separate but nested concerns: Video Quality (VQ), which refers to the video content itself – conformance to color and resolution benchmarks, which in many cases is mandated contractually by the content owner; Video Quality of Service (V-QoS), which refers to the error-free video delivery from the operator’s facilities to the customer premises over the broadband wide-area network; and Quality of Experience (QoE), which refers to the overall IPTV user experience, including application responsiveness, functionality, usability, and the service context that surrounds it.
For more information on the IPTV Video Quality: QoS & QoE — February 2007 report, click on the following link: www.mrgco.com/TOC_IPTV_VQ07.html
Sun Finally Illuminated Its IPTV Plans
Sun Microsystems Inc. (Nasdaq: SUNW - message board) finally took a big first step into the IPTV market today by introducing the Sun Streaming System, its platform for delivery of on-demand and streaming video content.
Sun's entry into the IPTV market has long been anticipated. The software the system is based on was developed by Sun founder Andy Bechtolsheim while he worked at startup Kaelia, which Sun acquired in 2004. (See Kealia Project Raises Questions, Cisco Big Bolts for Startup, and Sun Deals for Handy Andy.)
Sun's new system consists of the Sun Streaming Software, the Sun Fire X4950 Streaming Switch, and Sun Fire X4500 servers. According to Sun, the offering can reach 160,000 unicast streams and can hold up to 200,000 hours of video storage in less than three racks of equipment.
Sun is hoping to use that ease of integration to capture market share with the help of partners. In addition to players like ADB and Harmonic, Sun says it has been working with Minerva Networks Inc., Tandberg Television, Verimatrix Inc., and Widevine Technologies Inc.
Gary Schultz, president of Multimedia Research Group (MRG) Inc., says that a best-of-breed approach could be the way to go. "Best-of-breed has worked in Europe," he says. "In fact, the largest operations tend not to go with one supplier. The concept is pretty much proven."
AT&T Ventures Into 'Net TV
Legislation could help speed service to Tennesseans
"They don't want to go in and slash prices,'' said Gary Schultz, president of research firm Multimedia Research Group in Sunnyvale, Calif.
"They want to go in and offer quality service and build loyalty. They realize … if they come in as a low-priced leader, they put themselves in a bad position long-term."
No one in Tennessee can currently get AT&T's Internet-based TV service. But that may soon change.
|
