Study suggests global $46B IPTV market by 2014, but North America lags

Jim O'NeillSome more good news on the global IPTV market front, updated research from Multimedia Research Group forecasts that global IPTV subscriptions will push past 102 million by 2014, and revenues will surge from $17.5 billion to some $46 billion as telcos leverage increased bandwidth capacity and get maximum performance from existing infrastructure. That's a 25 percent CAGR that will come, the study said, despite continued difficult economic times.

It's interesting to note that much of the growth will come because telcos have continued to carefully invest in broadband and IPTV, using fiber in competitive markets, and using advanced DSL--such as channel bonding--and VDSL2 in less competitive markets. The caution has allowed them to outperform their cable and satellite competition without overspending.

No surprise that the Eastern European market is projected to mature early, as the pace of operator rollouts has picked up rapidly. There are now some 16 fully operational IPTV systems in place, with up to six more in the trial stage. That's a heck of a difference from the handful of IPTV trials or startups in the region as late as 2007.

What is a surprise is that the North American market will continue to lag somewhat, MRG forecasts, making up just under one fifth of the world market by 2014, compared to Europe's 45 percent, and Asia's 31 percent. In fact, the study says, of the 23 IPTV systems that will amass more than 1 million subs, almost all will be in Europe and Asia, and that's despite the fact that the U.S. ARPU, service and system revenues continue to be among the highest in the world.

Both Verizon and AT&T added a million subs each in 2009, and MRG says both will continue to grow, but using different strategies: Verizon, it says, is likely to switch from its QAM/IPTV architecture to all fiber-based after this year. AT&T, meanwhile, will likely use a mix of advanced DSL or FTTX.

As telcos continue to expand IPTV subscriptions, MRG says, the way they interface with customers is likely to change dramatically, which is no surprise to anyone who's been following the continued evolution of hybrid set-top boxes and over-the-top STBs like Roku and any of the gaming platforms like Xbox 360, PS3 and Wii. The research company said that STBs currently make up a whopping 70 percent of CapEx expenditures for some IPTV operators. The new wave of connected TVs, HSTBs and OTT STBs will add some much needed green to the bottom line.-Jim