Laffitte Conseil

Will IPTV ever move beyond early adoption?

Internet protocol television (IPTV) subscription service from telephone service providers accounts for less than 1% of the total US pay TV market, according to Gartner's “Dataquest Insight: U.S. Consumer Pay-TV Preferences Are Key for IPTV Market Entrants" report. That percentage is expected to increase to almost 8% by 2011.

Gartner projects that 84% of US households will have some type of paid TV subscriptions by the end of 2011, up marginally from 82% in 2006.

“The US pay TV market is dominated by cable and satellite providers by a factor of 2-to-1,” said Amanda Sabia, principal research analyst at Gartner, in a statement.

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Web Video Viewers Logging More Hours

Three-quarters of online video viewers watch more video than they did a year ago, and more than one-half expect to watch even more next year, according to a study conducted by Taylor Nelson Sofres and sponsored by AOL and Google.

Nearly two-thirds of respondents said they preferred keeping ads on video Web sites if it meant that content remained free.

"This study confirms that consumers accept video advertising in exchange for a free viewing experience, which is good news for advertisers," said David Klein, vice president of TNS, in a statement. "As with advertising across all media, if the video advertising is relevant it can contribute to and enhance an engaging media experience, not impair it."

More than three-quarters of respondents said that online video ads were as good as television for learning about advertisers. More than six in 10 respondents said they had taken some action after seeing an online video ad.

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Are Internet Television Ratings Low?

Only 9% of US adults have watched a full-length television program on the Internet, according to an August 2007 Ipsos Insight study conducted with Associated Press and AOL.

The estimate is not quite as bleak as it may appear, since Ipsos surveyed all US adults, not just Internet users or online video viewers. The US Census Bureau's mid-2006 estimate of the adult population was roughly 225 million. If 9% of the adult population has watched a full-length TV show online, that is over 20 million viewers.

"Rather than a wholesale shift in viewership from TV to the new-media channels, both media will actually grow in the next several years," said Paul Verna, eMarketer senior analyst. "Internet video will entrench itself in the content mainstream, right alongside TV, albeit not in such pervasive numbers."

By 2011, eMarketer estimates that 86.6% of the US Internet population will view online video, up from 62.8% in 2006. This translates to 183 million viewers in 2011, up from 114 million in 2006.

A March 2007 Ipsos Insight study found that 26% of online video viewers age 12 and older had watched full-length TV shows online. Using the eMarketer 2006 online video population figure as a reference, that means that nearly 30 million people tuned in. That figure includes teenagers, which likely accounts for much of the difference.

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China Inches Toward a Million IPTV Users

The total number of Internet protocol television users in China reached 736,000 in the second quarter of 2007, according to Analysys International's "China IPTV Market Quarterly Tracker Q2 2007."

That represents a 20.3% increase over the first quarter of 2007.

Henan, Shanghai and Heilongjiang were the top three IPTV regions, with more than 100,000 users each.

UTStarcom, Vcom and ZTE were the top three vendors in the market, with 43%, 40% and 13% market shares, respectively.