IPTV Five-Year Roadmap: Key Issues

By Aleksandra Bosnjak, Lead TMT Analyst
To date, IPTV services have consisted of two types of services: broadcasting a bouquet of TV channels and offering Video on Demand episodes of TV programmes, and more recently feature films, initially as pay per view, and now some telcos are selling titles.

A large number of different players are seeking to enter the IPTV market and are doing so from a variety of different angles. As yet no winning business model has emerged, so players are trying as many combinations and business models as possible to see what "sticks".

TV and movie studios are welcoming new rights buyers: telcos and mobile operators. Others on the traditional content value chain, such as producers and creative guilds, wonder what their share of the net online revenue cut will be. StrategyEye discusses some of the key IPTV issues.

Among the key messages are:

*  IPTV presents a huge opportunity worth more than USD3bn in 2007. However, the online space is becoming increasingly crowded, with all kinds of players entering the market.
*  The role of new mixed business models will be crucial for the survival of telco media services. However, telcos will not be the only ones experimenting with paid and free content. Today, telco IPTV operators have a firm grasp on the reins of closed network, multicast and secure content distribution solutions. Moving forward, operators will embrace some open network strategies. In fact, it is already happening, as we see some telco IPTV operators successfully running their own portals and, in some instances, using them to promote their IPTV paid services.
*  Telcos have to cut content acquisition costs and find a feasible content strategy. There are too many relationships and contractual co-dependencies for them at the moment and it will be a challenge for telecom operators to generate any revenue from content services over the medium term. Instead of cashing a big paycheck for premium content, efforts should be focused on innovative business models and content strategies.
*  Improved relationships and partnerships with vendors will be crucial over the short term. However, until IPTV becomes a mass-market product and IPTV standards are introduced, end-to-end solution integration will be one of the biggest challenges for operators.
*  As a result of 'new; rights buyers, traditional content providers and old content value chain participants, including studios, broadcasters, producers and artists, are increasingly looking for their 'revenue cut' from emerging digital media services such as IPTV and VoD. However, no short-term solution will emerge, as it is too early to estimate the economic impact of the new online medium on the industry as a whole. Moving forward, new media entrants such as telcos and mobile operators will have a significant impact on content providers, artists and guilds. A blending of industries will push everybody closer together.
*  Overall, the future lies in the successful path to integration into the emerging ecosystem, alongside open and closed web TV players. This will mean calculated risk taking and a move into the hybrid solution, which involves working within and adjacent to open networks or, in some instances, acquiring top performing web TV properties.

Table of contents:

1. IPTV Five-Year Roadmap: How big is the IPTV opportunity?

2. Analysis of key IPTV business models: lessons from old, emerging and winning models

3. The next step in content acquisition

4. Case studies: content strategy analysis and review of recent deal activity

5. Partnership issues between telcos and vendors

6. Multi-platform revenue share and intellectual content monetasation issues for content providers

7. Future outlook: the path to integration into the emerging ecosystem, alongside open and closed web TV players

8. Regional challenges: EMEA, North America and Asia Pacific

9. Business model protection strategies

Published: May 2008