The End of the Walled Garden: Led by Pay-TV Operators

Monday, February 8th, 2010 
IMS Research logo

IMS Research’s newest report ‘Market Opportunities for Internet Video to the TV’ reveals that demand for connected CE devices are being driven by increased bandwidth, the evolution of content delivery methods and the convergence of media and communications industries. These market drivers are resulting in new delivery methods, new content and evident changes in consumer behavior.

Adoption of over-the-top (OTT) content will become an extension of both pay-TV and stand-alone device subscription packages, but OTT on the TV will not become a ubiquitous solution until at least 2015, as it is still emerging in most countries. Additionally, she notes, “Many companies are making the OTT connection. Accedo Broadband is an example of a vendor that offers interactive and long tail VOD content for both IPTV services and connected TVs. BT Group, PCCW, ChungHwa Telecom (CHT), and OTE Group are all examples of tier one telcos that are casting a wider and deeper net.”

Should pay-TV operators be concerned?

“Not necessarily.” Kurlak concludes. “Pay-TV operators garnered 57% of global TV households at the end of 2009. They are changing their strategies to stay abrest of changing viewing habits. We have already seen numerous operators who are future-proofing their set-top boxes (STBs) with internet connectivity to enable future streaming services.”

The IMS Research study ‘IPTV: A Global Market Analysis’ reveals that nearly 13% of global IP set-top box (STB) shipments in 2008 were operator-deployed hybrid boxes with the ability to receive content via IP or digital terrestrial broadcasts. Of these 1.6 million hybrid STBs deployed, 87% were shipped to Western European TV households. “Uptake of operator-deployed IP+DTT STBs has been popular in both the UK and France, but it is anticipated that Italy, Germany, Spain and the Netherlands will see an increase through 2014.”

Kurlak continues, “Not only will hybrid STBs experience a surge from operators, but in the retail market as well. IP Vision, Fetch TV, Netgem and Video Futur are just a few examples of operator-free TV service business models available to Western Europe households.” The boxes supply à la carte VOD offerings, DVR functionality and digital multichannel TV capabilities in tandem with free-to-air (FTA) DTT channels.

“During the economic downturn, we did not see subscribers cancel their TV subscriptions and switch solely to OTT video, but subscribers are beginning to want it all.”