[opendtv] IPTV has an uphill battle against Cable, Satellite in the U.S.

  • From: "Manfredi, Albert E" <albert.e.manfredi@xxxxxxxxxx>
  • To: <opendtv@xxxxxxxxxxxxx>
  • Date: Fri, 5 Oct 2007 16:07:53 -0400

This article claims that "only" 82 percent of households use pay-TV.
Which means, either the number has a large margin or error or pay-TV
households are on the decline.

Some people who enjoy drama would get alarmed. What does it mean when
more than 3 percent of pay-TV households appear to have jumped ship in
one year? Is this a trend? The article does say, though, that by 2011
the percentage should have almost reached what we were told was the
percentage almost 10 years ago. I'm confused.

Maybe that's how you convince people that everyone is going to pay TV.
Every few years, you simply reset the percentage clock back by a large
step function, and then lull them into believeing that the trend
continues to be on the rise. Clever trick. A sawtooth function.

Not that Verizon's FiOS qualifies as IPTV, but it is a telco-provided TV
distribution service. As far as I can tell, they priced the service
right up there with cable and DBS. Even people who shift from cable to
FiOS don't do so for the price difference, as far as I have been able to
determine. They do it for a number of reasons, none of which is that
they expect a lower monthly bill.




October 02, 2007

IPTV has an uphill battle against Cable, Satellite in the U.S.

By Antone Gonsalves

Internet protocol TV services, which are offered by telecom companies,
face in the U.S. a saturated pay-TV market that will require attractive
pricing to lure consumers from cable and satellite services, a market
research firm said Monday.

Fully 82% of all U.S. households reported having a pay-TV subscription
in 2006, according to a survey by Gartner. The researcher forecasts that
number to increase to 84% by the end of 2011.

Currently, fewer than 1% of the total pay-TV subscribers subscribe to a
telephone company for IPTV service, Gartner said. However, that number
is expected to increase to almost 8% by 2011, mostly at the expense of
subscriber loss from the cable companies.

One area of intense competition among service providers will be in
delivering high-definition content, as more households upgrade to a HDTV
set. Nearly 40% of all pay TV households surveyed have either local or
cable high-definition channels included in their monthly pay-TV service,
according to Gartner.

Another competitive area is the interactivity features with pay-TV
subscriptions. The number of households using those features has
increased during the past year to 15% from 9%. Interactivity includes
program guides, a channel or service with on-demand content, and
advertisements where the user can click to request information.

"Many of these increases in feature adoption can be attributed to the
fact that the entry of IPTV into this market has caused the competition
to raise the ante," Gartner analyst Amanda Sabia said in the analyst's

To gain subscribers, IPTV providers are going to have to market highly
competitive, low-price offers for feature-rich packages that combine pay
TV, broadband, telephone, and mobile phone services. What is included in
the video component of these bundles also would be critical to IPTV
adoption, Sabia said.

"All the pay-TV providers will offer basically similar content," Sabia
said, "but those IPTV providers that differentiate their offerings and
are attentive to qualitative factors, such as quality of service, and
that provide positive customer experiences will succeed in this
well-established marketplace."

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