IPTV: challenges and opportunities

SUMMARY

Developing a successful value-added service business is essential for future revenue growth for wireline operators. Of such services IPTV is currently one of the biggest opportunities, as it not only opens up the broadcast TV market to telecoms operators but also a whole realm of possibilities around interactive video services and applications, as well as adjacent opportunities such as advertising. IPTV has consequently become one of the most discussed topics in the consumer telecoms space over the past 12 months. This report highlights the major tends, opportunities, issues and threats faced by operators moving into this industry.

TABLE OF CONTENTS

Executive Summary

• IPTV content
• IPTV driving next-generation access
• IPTV and the connected home

2007: the move away from ‘me too' content

IPTV services start to mature

Revenue opportunities

Continuing development of the IPTV supply chain

Is it all about advertising?

The coming of ‘over the top'

Case study: Verizon FiOS TV

• FiOS network architecture
• The FiOS transport network
• The FiOS access network
• FiOS TV service description and market entry positioning

Case study: France Telecom launches movie-making unit

• Just a tourist, or a real co-production player?
• Is this a true foray into content?

Case study: Joost

• What the service offers
• Strategy and business model analysis
• Content deals: who is on board
• Financial backing
• Competitive environment

Content driving next-generation access

• Higher and higher speeds
• A step change: TV and video
• Next-generation access: an expensive remedy
• Branding has to shift as well

A long way to go in the connected home

• No simple solution to ‘no new wires'
• The rise of the games consoles
• Cost of delivering broadband-enabled video to the home
• Web service partnership

Adding the managed part

• Remote access is the way forward
• Where to draw the line?
• Introducing advanced broadband support

Table of figures

• Figure 1 IPTV subscribers by region
• Figure 2 Average European incumbent wireline retail revenues
• Figure 3 IPTV revenue by region
• Figure 4 VoD revenue by region
• Figure 5 IPTV services supply chain and functions
• Figure 6 IPTV services supply chain activities
• Figure 7 IPTV revenue share examples
• Figure 8 Verizon FTTP network architecture
• Figure 9 FiOS TV programming line-up
• Figure 10 FiOS TV: key market-entry differentiators
• Figure 11 Components and functionalities of Verizon FiOS Home Media DVR
• Figure 12 Interface of Verizon's Media Manager
• Figure 13 FiOS: key competitive areas
• Figure 14 Joost's advertising launch partners
• Figure 15 Joost: major content agreements
• Figure 15 Major content agreements (continued)
• Figure 16 Overview of emerging Internet TV providers
• Figure 17 Broadband subscribers by technology, 2006- 2011
• Figure 18 Worldwide consumer DSL subscriptions by speed
• Figure 19 Western European consumer DSL subscriptions by speed
• Figure 20 China-India region consumer DSL subscriptions by speed
• Figure 21 Bandwidth requirements per application
• Figure 22 Service bundles and bandwidth requirements
• Figure 23 DSL coverage by region
• Figure 24 IPTV via standard ADSL architecture
• Figure 25 IPTV costs per customer based on Ovum's independent cost modelling
• Figure 26 Decreasing loop length, increasing bandwidth
• Figure 27 Annual IPTV and VoD ARPU
• Figure 28 UK telecoms market revenues 2005- 2010
• Figure 29 UK broadband market branding quadrant
• Figure 30 The connected home and digital content
• Figure 31 Connected home cost summary ($)
• Figure 32 Call reduction due to Belgacom's ‘Easy Install' (BEI)