IPTV slow to hit targets

MAXIMUS · #1 30-05-2008, 11:53 PM

IPTV slow to hit targets

Chris Forrester,

For the past half-dozen years industry experts have been predicting that “this year” will be the one when IP-based TV systems and subscribers start making progress. The first quarter of 2008 has seen considerable progress made – but there’s still lots to do, especially in the USA.

Q1/2008, according to data from Screen Digest, saw AT&T’s U-Verse add almost 150,000 new subs, a huge improvement on the same period last year when just 15,000 had been added. But Verizon’s FiOS efforts achieved much better results, adding 263,000 new IPTV subs.

These numbers are praiseworthy, especially in a market where cable is entrenched and consumers have had the option of picking multichannel TV from a pair of DTH operators since 1994-5. Collectively the USA’s top five cable operators lost more than 500,000 subs, some of which Screen Digest says will have churned to either DirecTV or Echostar’s Dish DTH operations.

IPTV’s benefit, says Screen Digest, is highly competitive pricing. Both U-Verse and FiOS are undercutting basic cable in terms of price.

Verizon’s FiOS has gone “from strength to strength” says the report, with subscriber numbers continuing to accelerate despite the service being on offer since 2005, and helped by the rolling out of the service to new regions. Screen Digest says it expects FiOS to continue to climb for the rest of this year and into next year as analogue TV is switched off, and by then (February 2009) it could well be sitting on 3m customers to its IPTV service.

However, AT&T is “struggling” to meet its targets, says the report. Q3/2007 saw U-Verse claiming it would be installing 10,000 homes a week by the end of the year. “Although it is possible that the figure was hit in the weeks up to Christmas, the first-quarter 2008 shows that 10,000 was still a slightly optimistic target for a sustainable growth rate,” says Screen Digest, adding that 9,000 was the more normal rate. AT&T has also been “plagued” by technical Snafus, complete with exploding street cabinets (faulty batteries).

Nevertheless, Screen Digest says that by 2012 it expects the US to have almost 8m IPTV homes – and almost 7m of those will be shared between U-Verse and FiOS.

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