Futuristic outlook of IPTV, and the role of telecom and IT players
IPTV, an alternative to traditional digital transmission
In the digital content consumption space, the world is changing with the advent of new technologies attributed to the mindset and behavioral change of the consumers who want the content to be easily accessible and get at an affordable rate. For example, TV industry had shifted from analog which was prevalent in the late 1990s and early 2000s to digital transmission in the mid-2010s, and now to a different ball game with the development of recent technologies like IPTV.
With the development of 5G that would potentially make data consumption cheaper in the future, along with exponential increase in customer consumption preference of OTT content, and with telecom companies increasing the penetration of fixed line broadband services, IPTV is one thing that can potentially replace the digital transmission like DTH, DTT, FTA etc. in the future.
Internet Protocol Television
IPTV, as against to the conventional signal transmission like cable, terrestrial, and satellite, uses internet to deliver continuous television content. Also, IPTV, unlike the traditional transmission, provides more straight forward, direct, and effective distribution of content comparatively owing to its independence on intermediate distributors like cable operators.
IPTV current market and expected growth
As seen in the below graph (Statista Estimates), IPTV market as of 2019 was around US $35 Billion[1], and is expected to reach US $150–200 Billion in the year 2025 growing at a CAGR of 10–20%[2].
Taking example of a developing country like India, out of the 153M pay TV subscribers in 2017, ~42% use digital satellite, ~42% use digital cable and around ~15% use analog cable, and close to 0.76% use IPTV. This IPTV penetration is expected to rise to 2.9% by 2025 with a CAGR of ~19%[3,4].
In countries like US, the IPTV penetration is to increase from 2% in 2017 to 12% in 2025 with a CAGR of ~25%[5]. Apart from this, European countries like Iceland has IPTV penetration of 69% followed by Hong Kong which has 54% penetration[7]. According to the forecasts as shown in the below figure, in worldwide, IPTV penetration is expected to be in the convincing range of 25% from 12% in 2017[8,9].
Factors to breach the estimated IPTV projections
Adding to these projections, the impact of increasing customer SVOD preference, OTT penetration, 5G growth’s impact, competitive telecom companies etc., would further add up to the increase in growth of IPTV users which would be a tad higher than the estimated figures as seen in the above figure, which is explained below.
a) Increased OTT consumption
One key aspect is the increased consumption of OTT content and preference for Video-On-Demand (VoD) services in recent times. Projections indicate that there will be over 1.3 billion subscription video-on-demand users worldwide by the year 2025[6]. Companies like Jio are offering combination of services including OTT, Video calling, Conferencing, HD channels, Videogames and Smart homes. Such comprehensive offerings attract clients to move towards IPTV driving its growth. On-demand video consumption allows customers to pay per view based on their preferences, choose, and subscribe what they want, and this enhances the customization offered to the customers with real-time streaming protocol. With increased disposable income, the expectation of increased customer experience in terms of quality like HD, UHD of OTT content, and on-the-go television experience is also increasing IPTV penetration. People more inclined to OTT usage would find IPTV more efficient than the satellite and cable mode.
b) Network Service Providers
The Telecom companies also play a role in the penetration of IPTV services. Owing to the customer demand, service providers started to offer triple-play bundled package services including voice, video, and data, in one single subscription, thereby providing customized packages as per their requirements. Adding to this, services like IPTV live subscription offered by Jio, Airtel etc. to view the media content on-the-go promotes mobile viewers and other users to move away from traditional medium. Also, service providers have even started collaboration with content libraries to offer media content to the customers in addition to the streaming facilities. For example, Deutsche Telekom AG started new Nick+ service in March 2019, which provides accessibility to video content on its IPTV platform. These new services are expected to result in higher audiences and thus ensure continual business practices for the company.
Also, there were several mergers and acquisition by the substantial players to cater to the IPTV segment. For instance, ARRIS International plc’s merger with Commscope Inc., and Huawei Technologies Co. Ltd. collaboration with OSN to deliver IPTV solutions to telecom operators in the Middle East[9].
c) 5G Adoption
Increased 5G adoption would provide greater internet coverage with high speed than the one which is currently available. It’s believed by industry experts that GB consumption of 5G data would increase reducing the cost/GB of consumption in the future[11]. Companies like Huawei have also stated that 5G can reduce cost for data telcos substantially[12]. This reduces the dependency of fixed broadband as discussed above for IPTV connections and makes it possible for seamless use of IPTV even in the wireless mode.
d) Internet Penetration
Internet is an important parameter required for the IPTV services. Demand from customers for high-speed internet leading to increased fixed broadband connections owing to its unlimited bandwidth and transmission capability of optical fiber fuels IPTV penetration. FTTH is observed to be best suited mode for IPTV consumption. This effect can be significantly observed in developing countries in India and China. For example, Reliance Jio had launched its Jio GigaFiber FTTH service offering data, wifi-calling, and IPTV benefits under single plan to promote its IPTV services. Vodafone GmBH completed its gigabit cable rollout in 2019, and Deutsche Telekom carried out large investment plans for deploying optical fiber[10]. Some of the other players in IPTV market globally includes Huawei, Verizon Communications, AT&T, Ericsson AB, Cisco Systems etc.
Countries with higher internet penetration have more IPTV penetration as seen in the below figures. Countries like South Korea, Hong Kong, US with high fixed broadband penetration correlates to high IPTV penetration, whereas countries like India with low fixed broadband penetration has less IPTV penetration.
Key Initiatives for Telecom Players to target IPTV segment
Owing to this potential high growing market, telecom players have a prominent role to play in the future. The advantage for the telecom players is its already existing functional infrastructure for high-speed internet which is much needed to cater the IPTV connection service unlike the traditional digital transmission players like DTH, DTT and cable. But, because of the rapid technological developments like 5G telecom players should be planning to capture the prominent market share. The key futuristic initiatives for telecom players include,
- Develop high-speed internet infrastructure
High speed and cheap data are the most important requirements for IPTV service provision. As discussed before 5G would reduce data costs and the telecom players should revamp their infrastructure for 5G.
Telcom players should speed up their 5G infrastructure and start increasing the coverage of the optical fiber installation like FTTH. Though 5G would help in IPTV penetration, a fixed connection would be better suited for IPTV services. A notable example is the case of Jio, which has started to promote the FTTH optical connection and providing IPTV services across India. Better the infrastructure for internet connectivity provision higher the penetration of IPTV offerings for the telecom companies.
2. Improve technological capability
Improvise use of hosting solutions like Cloud Technology to lower costs related to storage and content distribution providing a better infrastructure for the content streaming facilities.
The Cloud system for storage, data analytics, recommendation engine and content distribution should be customized for the targeted offering for the telecom players. The end-to-end process from customer acquisition and on-boarding and billing systems should be seamlessly operated in the cloud platform.
In addition to the cloud technology due to increased provision of services by the telecom players due to IPTV offering, the back-end technological capabilities like Operating Support System and Business Support System should be revamped to handle more functional load.
3. Transform into Complement Digital Service Provider
Telecom players should focus and develop capabilities and systems for integrated services to transform into Complement Digital Service Provider (CDSP).
The digital service provision includes media content, movies, news content etc. for the customers to view it from the service provider’s application. This will help customers to view the content on-the-go and as well from in-home set-up to watch the content through television. When more content is available in the platform the customer would be inclined to choose the provider.
This could be done by
· Partnership with the OTT content providers with sole discretion rights to telecom players. Currently, Jio and Airtel have partnerships with the OTT providers like Netflix, Disney etc.
· Partnership with Broadcasters like Star, Zee, etc. to increase content availability in the platform
· Create own content and movies to leverage sole ownership to attract more customers
These would provide a one-stop solution for customers who use data and interested to view all the content on-the-go and as well through television making telecom IPTV a preferred choice for them.
Role of IT service providers/ Technology players
1. Technological Support
IT players could help in the provision of support for the required OSS/ BSS services for the telecom companies. For example, TCS has a target specific offering-HOBS- for the above-mentioned requirement. In addition to it, they could support for the cloud infrastructure readiness to handle this in a seamless manner with in-built recommendation engine, analytics etc. They could provide a service integration role with the cloud service providers like Amazon and customize it as per the needs of the telecom player.
2. 5G Readiness
IT players could support with it’s Next-gen Network services to enable the CSPs to be digital ready with 5G through its products including Software-defined Networking (SDN), Network Function Visualization (NFV) etc. Tower Management and Monitoring through technologies like IoT could also be provided by technology players (eg. TCS’ Digital Twin Offering)
3. Content Solution and Services
Technology Solutions could assist in
· Content advisory services including content process maturity assessment, transformation blueprint, content architecture and product evaluation
· Content technology services like intelligent content platforms, information management, digital rights management
· Content operation services including digital marketing, creative content development, and content analytics
References:
1. Global pay TV & online subscription markets | Statista. (2021) from http://www.statista.com/statistics/1203730/global-pay-tv-online-video-subscription-markets/
2. Global Internet Protocol Television (IPTV) Market Outlook to 2030 — Growth and Change Resulting from the COVID-19 Pandemic from https://www.prnewswire.com/news-releases/global-internet-protocol-television-iptv-market-outlook-to-2030---growth-and-change-resulting-from-the-covid-19-pandemic-301080273.html
3. IPTV penetration in India 2025 | Statista. (2021) from http://www.statista.com/forecasts/1137521/iptv-penetration-forecast-in-india
4. Television industry in India | Statista. (2021). from http://www.statista.com/study/57043/television-industry-in-india/
5. IPTV penetration in the United States 2025 | Statista. (2021) from http://www.statista.com.iima.remotexs.in/forecasts/1137622/iptv-penetration-forecast-in-the-united-states
6. Television Industry Worldwide | Statista. (2021) from http://www.statista.com.iima.remotexs.in/study/17302/television-industry-worldwide-statista-dossier/
7. Countries with highest IPTV penetration worldwide 2020 | Statista. (2021) from https://www.statista.com/statistics/322763/iptv-penetration/
8. IPTV penetration in the world 2025 | Statista. (2021) from http://www.statista.com/forecasts/1137582/iptv-penetration-forecast-in-the-world
9. 5G | Statista. (2021) from http://www.statista.com/study/43403/5g-5th-generation-mobile-networks/
10. Internet Protocol Television Market Growth Report, 2020–2027. (2021) from https://www.grandviewresearch.com/industry-analysis/internet-protocol-television-iptv-market
11. 5G will make cost of GB lower than 4G: Experts — ET Telecom. (2021) from https://telecom.economictimes.indiatimes.com/news/5g-will-make-cost-of-gb-lower-than-4g-experts/77282742
12. Rathee, K. (2021). 5G can reduce data cost for telcos substantially: Huawei, from https://www.business-standard.com/article/companies/5g-can-reduce-data-cost-for-telcos-substantially-huawei-117120800898_1.html#:~:text=With%20preparations%20on%20for%20the,likely%20to%20drop%20quite%20substantially.
