The embryonic form of foreign IPTV business can be traced back to 1985. At that time, several telecommunications companies in the United States (GTE, Ameritech, and Bell Atlantic) conducted experiments on video transmission over fiber optic and DSL. However, due to the fact that the services provided by these companies were not significantly different from those of cable television companies, the video services of telecommunications companies did not become mainstream.
The real starting point for the development of IPTV business should be the IPTV business launched by Video Networks in the UK in 1999. Afterwards, many foreign telecom operators have successively entered the IPTV market. The main driving factors are technological progress and the expansion of market demand: (1) the advancement of IPTV's key technology - video compression technology, which enables video programs to achieve higher picture quality with lower bitstreams; (2) The development of global broadband networks has provided a reliable and stable path for the transmission of IPTV services; (3) The rapid development of broadband access in the world has solved the last mile bottleneck problem in IPTV service provision; (4) Telecom operators have been vigorously developing broadband, but have not received sufficient profits from it, and the profitability of broadband is still limited to the collection of access fees; (5) The opening up of the telecommunications market has led to an increasing number of new entrants entering the telecommunications market through the relaxation of regulatory policies, especially cable television operators entering the telecommunications market, providing users with "triple play" services with existing television services and new telecommunications services. This measure has created a strong sense of crisis for telecommunications operators, who urgently need to find innovative services to improve ARPU and enhance user stickiness; (6) The prosperity of broadband access has not brought prosperity in content services, and most of the business and applications on broadband networks are still in the narrow band period, and the consumption needs of broadband users are far from being met.
Overview of IPTV Market Development
The operators deploying IPTV services are mainly concentrated in Europe, America, and some countries and regions in the Asia Pacific region. Telecom operators usually use high-speed DSL or FTTP technology to provide IPTV services to users. By the end of 2004, the two largest operators with the highest number of IPTV users were FastWeb in Italy and PCCW in Hong Kong, China.
1. North America
In the North American IPTV market, traditional Canadian telecommunications companies are at the forefront. Manitoba Telecom (MTS) and SaskTel have already opened IPTV services using VDSL and ADSL, and Telus and Canadian Bell also plan to enter this market in 2005.
From the perspective of user development, as of September 2004, the number of IPTV users of Canadian telecommunications operators was approximately 50000, accounting for about 2% of the total number of television users in Canada. It is expected that by the end of 2006, the number of IPTV users will reach 250000, with a user market share of 17%, and its market share will steadily increase.
Compared with the Canadian IPTV market, the development process of the US IPTV market is relatively stable. In 2001, Qwest Communications took the lead in launching an IPTV service based on VDSL technology to users in the Phoenix region. Afterwards, numerous independent local operators in the United States actively carried out IPTV services on DSL networks and fiber optic networks within their service areas. Since 2005, the three major RBOCs in the United States - SBC, Southern Bell, and Verizon - have also started deploying IPTV services.
2. Europe
Many telecom operators in Europe also have a positive attitude towards IPTV business, especially FastWeb's success in IPTV business in Italy, which has changed the wait-and-see attitude of many operators. Almost all traditional European telecommunications operators have conducted IPTV experiments, with France Telecom being the most proactive and having already opened services in Lyon.
Belgium Telecom, Netherlands Telecom, Austria Telecom, and Norway Telecom are all conducting commercial experiments on IPTV.
3. Asia Pacific region
The development of broadband has greatly promoted the deployment of IPTV in the Asia Pacific region, and many telecom operators have entered the IPTV market. These telecom operators usually use DSL or fiber optic access technology to provide users with high-speed data, VoIP, and video services including digital television and video on demand. The better performing operators are PCCW in Hong Kong, China and Yahoo in Japan! BB。
Since early 2003, Yahoo! Since the opening of BB's multi-channel radio, television, and video on demand services in Tokyo, Yahoo! BB's television business is gradually integrating with its existing telephone and broadband services, which has driven the rapid growth of TVover DSL users.
PCCW in Hong Kong, China launched a DSL based digital television service in September 2003, with 367000 signed users by November 2004.
Business and Tariffs
The IPTV service not only expands the use of telecommunications terminals, but also expands the range of services that television terminals can support, covering a very wide range of services. IPTV can provide services mainly including television services, communications services and various value-added service. Specifically, television services refer to services related to television business, such as broadcasting and television, on-demand television, personal video recording, etc; Communication services mainly refer to voice services based on IP, instant messaging services, television short messages, etc; Value-added service refers to TV shopping, interactive advertising, online games, etc.
When foreign telecom operators enter the IPTV market, their preferred services are often television and VOD services. Some operators also provide a variety of value-added service, such as Canada's MTS, which provides interactive program navigation and call display that can be searched by topic or title, and has opened a TV portal, through which users can learn weather and other public information as well as channel information; FastWeb in Italy has opened the PVR (Personal Video Recording) service, which allows users to control live television through STB operations; Some operators also offer applications such as television commerce.
Foreign telecom operators mainly consider market affordability and investment in deploying IPTV services when pricing IPTV services. Due to the degree of market competition in their respective countries and regions, as well as the differences in network investment and operating costs among telecom operators, there are significant differences in IPTV service fees among them. The basic cost of IPTV services for Video Network in the UK is $65 per month (including 1Mbps broadband access), while for Yahoo in Japan! BB is $19 per month.
The difference in business fees also reflects the competitive strategy of operators when entering the IPTV market. Generally speaking, in countries with a high degree of market openness, in order to establish a competitive advantage against cable TV operators who have already entered the telecommunications market, maintain the loyalty of existing telecom business users, and reduce user disconnection rates, telecom operators often lower the pricing of IPTV services compared to existing market competitors when deploying IPTV services, and provide users with multiple business bundles to achieve greater discounts for users; In order to win users from competitors or cultivate users' habits of using pay TV, telecom operators often launch IPTV services at low prices. In the fiercely competitive pay-TV market in the UK, the IPTV service fee is generally between $20/month and $30/month, while in some European countries that are not yet accustomed to paying for television, the IPTV service of telecom operators is relatively low, such as Neuf IPTV service fee in France, which is less than $10/month.
Operation mode
In North America and some European countries with high levels of market competition, the government has gradually relaxed regulations on the mutual entry of cable television and telecommunications operations, allowing them to penetrate each other, providing opportunities for cable television operators to enter the telecommunications industry.
In response to the competitive situation where cable TV operators provide users with a fusion of cable TV services, broadband access, and telephone services, many telecom operators in Europe and America have also begun to deploy video services mainly focused on television. They have also launched a triple play business model that integrates IPTV, broadband access, and telephone services in the telecommunications field, in order to maintain a more favorable position in the new form of competition.
Therefore, foreign telecom operators often carry out IPTV services in a triple play mode. The Triple play model reflects the close connection between operators and users, and operators can provide users with three types of services simultaneously; Users can use services through the same terminal or different terminals in the home network.
Triple play brings discounts on pricing to users. The bundled services of MTS TV and DSL provided by MTS in Canada have a 12.5% reduction in fees compared to the sum of the two business fees. The Triple play model has greatly promoted the development of IPTV, while also bringing sustained growth in ARPU to operators. About 60% of residential users of SureWest, a small independent telecommunications company in California, USA, have ordered triple play.