IDC Predicts Euro IPTV Growth

LONDON -- Telecom operators across Western Europe are launching IPTV services in an effort to increase revenues and improve customer satisfaction for their broadband services. In a new study on IPTV services in Western Europe, IDC has found that the potential for success with IPTV services varies widely from country to country, depending on the penetration of existing pay TV services, the level of broadband competition, and the commitment of incumbent and leading competitive operators to investing in the network upgrades and content necessary for high-quality IPTV services.

IDC estimates that the market for IPTV services in Western Europe was worth $62 million in 2004, with less than 1% of households subscribing to IPTV services. The market will boom over the next five years, growing from $262 million in 2005 to $2.5 billion in 2009. By that year, 6% of Western European households will subscribe to IPTV services. By 2009, IDC expects that all European incumbents and a large portion of the major alternative tier 2 providers will offer IPTV services. DSL will be the most widely used platform for the service, though a minority of households in a few countries will receive IPTV services over metro Ethernet connections.

"By the end of the forecast period, France, Italy, and Spain will be the largest IPTV markets in Europe, accounting for over 60% of the total market," said Jill Finger Gibson, research director, European Telecommunications Services. "Operators in these countries were among the first to launch IPTV services and have demonstrated that they understand the technical requirements and strategic partnerships necessary to launch successful IPTV portfolios." Other countries expected to experience strong growth in IPTV services over the next five years are the Benelux and Nordic countries.

IDC's study Western European IPTV Forecast 2004–2009 (Doc #BT06M, August 2005) says that in order to be successful, broadband operators will need to differentiate their service bundles from the video services already available in the market. The area they will be able to do this is in high-quality content underpinned with interactivity. This includes instantaneous access to all kinds of on-demand content, time-shift TV, or network-based video recorders, and even viewer-driven choice of camera angles. The right to show premiership football matches is a particularly important element of content provision and will be key to the success of all IPTV operators, particularly those operating in countries where most households already subscribe to some form of pay TV service.

IDC