Electronics Production | July 10, 2007

IPTV Video Revenue to Hit $26 Billion by 2011

Telcos increasingly are looking to Internet Protocol Television (IPTV) offerings to augment their
declining voice communications revenue, causing the market for IPTV video services to rise by a factor of nearly 34 from 2006 to 2011, iSuppli Corp. predicts.
The market for IPTV video services will rise to $26.3 billion in 2011, up from $779.2 million in 2006, as presented in the attached figure. This figure does not include advertising and value-added TV services.

Telcos view IPTV as an opportunity to recapture the revenue generated by many of the Internet-based services that have bypassed them by traveling through their broadband pipes.

However, IPTV will deliver significantly more than just video services, offering access to digital
music, on-demand gaming, data services, home security and other items. These value-added offerings will boost global IPTV video revenue stream by more than $1 billion by 2010.

While this represents huge growth, IPTV still will have significant room for expansion in the years following 2011.

“Subscriber and revenue growth in the IPTV market will be awesome," said Frank Dickson, principal
analyst with iSuppli. “However, to put things into perspective, Comcast had 2006 pro-forma cable revenue of more than $26 billion. It is very likely that the entire worldwide IPTV industry in 2011 will not be as large as Comcast alone is."

Many IPTV deployment strategies are focused on next-generation video services. Because of
this, competition for services is likely to focus on features and benefits—rather than price. Features such as High-Definition (HD) programming, Digital Video Recording (DVR) service and remote access are the main features that telcos are focusing on to gain a competitive advantage Pay-Per-View (PPV) and Video on Demand (VoD) service will combine to generate nearly $300 million in revenue in 2007.


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