IPTV Monitor—Issue 4

The latest issue of the IPTV Monitor tracked three major developments: content management, new hopes for technology and operations challenges.

Indeed, securing compelling content is arguably the most serious challenge that IPTV providers face. On the technology front, operators and other players are gaining confidence in new set-top-boxes and other technology to support IPTV. Another tough challenge facing IPTV operators is managing partnerships with content and technology providers.



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Accenture and the Economist Intelligence Unit produce the IPTV Monitor, summarizing major trends in the global IPTV industry. The newsletter is the result of a wide-ranging Accenture/Economist survey of more than 300 executives in technology and media firms involved in the IPTV business. The survey covered 40 countries in three regions—Europe, the Americas and Asia Pacific.

We found a number of growing trends in this quarter’s issue of the Monitor. Among them:

• Securing compelling content is arguably the most serious challenge that IPTV providers face. A small but increasing share of operators, however, believe their content model is now ready, and a majority think they are close to ready.
• Content providers are testing new online distribution models that bypass IPTV. However, most are unlikely to cut ties with network operators that deliver much of their content any time soon.
• Western Europe’s operators now lead the world in IPTV rollout. Their strategy is to retain customers in saturated broadband markets, offering content as part of a triple-play package.
• As the number of companies moving into online content delivery grows, competing offers to IPTV are becoming more sophisticated.
• Many unknowns still hover over operators’ ability to ensure service quality and to scale network operations as viewership increases. However, we found that commoditization can only help reduce operators’ costs.
• Managing partnerships with content and technology providers remains the toughest operational challenge for operators. Other major operational hurdles include developing creative marketing strategies and effective customer service.
• While telcos are recruiting new talent to manage IPTV content and marketing, they will also need to implement cultural and organizational changes to help new staff work effectively.
• Network operators and other players are gaining confidence in new set-top-box and other technology’s ability to support IPTV.

We drew several important conclusions based on our findings in this issue of the Monitor.

Content Management
Operators know that acquiring high-profile content can be a “virtuous circle”: it raises their IPTV service's profile, attracting customers, who in turn draw more content providers and advertisers in their wake.

Technology
The telecom industry tends to develop and promote new technologies first, then look for services to deliver them. So it’s not unreasonable to expect the industry to try to clear IPTV technology hurdles before any others. And this is certainly the case, according to our findings. What’s more, the number of executives who consider transport network equipment, software and video platform technology and set-top boxes ready to support IPTV has increased.

Operations
The era of mass entertainment may be giving way to personalized content. But operators investing in national network upgrades and set-top box development for IPTV still need large economies of scale to pay off investment costs. Operators still face considerable operational hurdles before they can even consider deploying service to multimillions of customers.

The industry recognizes that good content is essential to launch an IPTV business, but it also has to ensure that content is easy to access and view.