IPTV can stop ARPU decline

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IPTV can stop average revenue per user (ARPU) decline, but it might take years to overcome the technology and content hurdles, according to a panellists at the NetEvents conference in Malta.

Gartner analyst Ian Keene told attendees that IPTV could help telecoms firms and other market entrants to improve or stabilise their ARPU decline, bring in new subscribers and reduce churn.

Firms should see IPTV as a platform and not a service, he said, as the technology can be used to deliver pay-TV, video on demand, time-shifted video and even for storing home video.

But it's a tricky investment for firms, because of the cost of improving networks and also the uncertain customer base. "Because of the significant investment, it's hard to put a business case together," Keene said. "How much will people be willing to pay?"

Another hurdle for companies is that IPTV doesn't look set to pay off quickly, but could take as long as four or five years, before it affects the market, Keene said.

That's partially because of the need to upgrade networks and technology. Current technology works for the first wave of users, but expanding takeup will require new innovations and standards to keep them interoperable. "DSL works just fine for the fist wave but for the second wave... big change needs to happen," said Stephen Garrison, vice president of marketing for Force 10 Networks.

"The technology is there, but there's also different ways to deliver the network," said Alan Lippman, chief video architect at Redback Networks. "There's a lot of options to lay out." And those different options standards are necessary, said Larry Desjardin, director of research and development at Agilent Technologies, who said differing technology shouldn't get in the way of IPTV the way it does now.

Ensuring content is attractive enough to overcome increased customer charges is also key, the panellists agreed. "Personalising content is the whole point of IPTV... you can choose what you see," said Garrison, suggesting letting people view films before they hit the cinema or download music before it reaches stores could be a big driver for IPTV takeup.

And Keane warned that opportunities for IPTV differ by country, depending on broadband networks, local regulators, availability of content, and culture considerations, especially how much local customers are willing to pay for content which may not be in their native language.

Indeed, it's a diverse group of countries leading the pack. "It's not the usual bunch of countries leading and usual bunch of countries following," said Keene. Rather than the typical first adopters of the US or Northern European countries, the leaders in IPTV are France, Hong Kong, Spain and China. The UK isn't even in the top ten by number of subscribers.

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