IPTV Business Models: Profit and loss in the telco TV space

Table of Contents

• Tables and charts
• Executive Summary
• IP as a delivery method has significant technological ramifications
• Business models are varied, however some do not justify the cost of launching IPTV

• Introduction
• State-of-play:
• Western European IPTV' s mixed bag
• Eastern Europe slow to take off

• IPTV in context:
• IPTV correlated with broadband at a regional level
• Incumbent pay-TV has a less obvious impact on uptake

• Technology in use in IPTV
• Delivery method:
• IPTV is unicast
• Advantages of IP
• Disadvantages of IP

• Access and compression:
• Access technologies in IPTV
• Technology choice has business implications
• IP technology falls short for HD

• Business models in IPTV
• The business case for IPTV
• Business models in European pay-TV
• Cable TV often a utility option
• Satellite occupies the premium TV market
• DTT operations aim for mass market success

• Adopted approaches - content, features and drivers:
• Subscription-free IPTV
• Tier 1 operators go for free
• Free IPTV: Running backwards?
• Broadband the key for free IPTV
• Amenity TV
• The evolution of amenity TV
• To deal with the devil - reselling
• Premium TV strategies in Europe
• Pay-IPTV in general struggles in Western Europe
• Eastern Europe lacks the strong incumbent competition
• Triple-play and IPTV

• The significance of VoD to IPTV:
• The spread of the hybrid model
• Profitability in the IP market - does IPTV make money?
• Key issues affecting profitability in the IPTV space
• Premium content impact
• Sports content a double-edged sword
• Options restricted for movies
• Premium content deals best left until service maturation
• Hypothetical service launch case studies
• Churn reduction alone not a viable model
• Costs outweigh revenues at low ARPUs

• More to IPTV strategy than ARPU:
• PVRs - selling point or liability?
• PVR strategies require higher ARPUs and additions
• IPTV fails to help growth of broadband access products
• Content is correlated with improved broadband growth rates
• Business model summary

• Country profiles
• Austria IPTV Profile
• Belgium IPTV Profile
• Denmark IPTV Profile
• Estonia IPTV Profile
• Finland IPTV Profile
• France IPTV Profile
• Germany IPTV Profile
• Greece IPTV Profile
• Hungary IPTV Profile
• Iceland IPTV Profile
• Ireland IPTV Profile
• Italy IPTV Profile
• Latvia IPTV Profile
• Lithuania IPTV Profile
• Netherlands IPTV Profile
• Norway IPTV Profile
• Poland IPTV Profile
• Portugal IPTV Profile
• Romania IPTV Profile
• Russia IPTV Profile
• Slovakia IPTV Profile
• Slovenia IPTV Profile
• Spain IPTV Profile
• Switzerland IPTV Profile
• Sweden IPTV Profile
• UK IPTV Profile

Tables and Charts

• Tables and charts
• Executive Summary
• Introduction
• IPTV subscribers in Europe (2000-2012)
• IPTV market shares
• IPTV market shares
• European IPTV launches by year
• Broadband penetration by country (2007)
• Broadband vs IPTV penetration (1999-2012)
• IPTV vs pay-TV penetration (2007)

• Technology in use in IPTV
• IPTV distribution is unicast: one-to-one
• Satellite TV is multicast: one-to-many
• Cable has a one-to-one connection, but uses multicast feeds
• DSL technology consumer bandwidths
• Access Technology market shares end 2007 (by active IPTV subscribers)
• Codec shares end 2007 (by active subscribers)
• Access technology and codec use impact content availability on a network
• MPEG-2 vs MPEG-4 compression rates
• European IPTV revenues

• Business models in IPTV
• Pay-TV penetration by country
• TV platform penetrations across Europe
• Key IPTV operators with free TV packages
• 40 per cent of European IPTV households get their service free
• Deviation of broadband growth rates from average - Sweden
• The telco' s dilemma
• IPTV ARPUs across Europe
• Proportion of revenues derived from on-demand for Amenity TV
• Premium third party soccer content on European IPTV
• European pay-TV ARPUs (2001-2012)
• Eastern European IPTV ARPUs higher than market average
• Eastern European IPTV subscribers (2004-2012)
• European IPTV transactional on-demand revenues (2000-2012)
• On-demand enabled homes by platform (2005-2012)
• VoD revenues as a proportion of total IPTV revenues
• European hybrid DTT-IPTV households (2004-2012)
• European households equipped with DTT-IP set-top boxes
• Major IPTV operators with DTT-IPTV hybrid services
• Belgacom vs Tele2 - TV subscriber bases (2005-2012)
• Breakdown of costs for the first six years of operation of a basic IPTV service
• Comparison of cost-cutting measures on triple-play IPTV (for equivalent customer bases)
• Basic triple-play service net profits over double-play service (ARPU comparison)
• Basic triple-play service net profits over double-play service (subscriber comparison)
• European PVR customers
• Proportion of IPTV customers taking PVRs (2001-2012)
• IPTV service using PVR: revenues, profits and net advantage over pure double play service
• HD-PVR IPTV service ARPU comparison - years taken to achieve net positive outcome
• HD-PVR IPTV service subscriber comparison - years taken to achieve net positive outcome
• Deviation of broadband growth rates from average - France
• Only revenues from broadband subscriptions stimulated by IPTV should be attributed to the IPTV business segment
• BT and Telecom Italia broadband growth rates in relation to market average growth rate
• IPTV service using PVR: revenues, profits and net advantage over pure double play service

• Country profiles
• Austria IPTV Profile
• Austria IPTV market profile
• Market shares of primary TV sets
• IPTV market revenues
• IPTV revenues
• Pay vs free IPTV subscribers

• Belgium IPTV Profile
• Belgium IPTV market profile
• Market shares of primary TV sets
• IPTV market revenues
• IPTV revenues
• Pay vs free IPTV subscribers

• Denmark IPTV Profile
• Denmark IPTV market profile
• Market shares of primary TV sets
• IPTV market revenues
• IPTV revenues
• Pay vs free IPTV subscribers

• Estonia IPTV Profile
• Estonia IPTV market profile
• Market shares of primary TV sets
• IPTV market revenues
• IPTV revenues
• Pay vs free IPTV subscribers

• Finland IPTV Profile
• Finland IPTV market profile
• Market shares of primary TV sets
• IPTV market revenues
• IPTV revenues
• Pay vs free IPTV subscribers

• France IPTV Profile
• France IPTV market profile
• Market shares of primary TV sets
• IPTV market revenues
• IPTV revenues
• Pay vs free IPTV subscribers

• Germany IPTV Profile
• Germany IPTV market profile
• Market shares of primary TV sets
• IPTV market revenues
• IPTV revenues
• Pay vs free IPTV subscribers

• Greece IPTV Profile
• Greece IPTV market profile
• Market shares of primary TV sets
• IPTV market revenues
• IPTV revenues
• Pay vs free IPTV subscribers

• Hungary IPTV Profile
• Hungary IPTV market profile
• Market shares of primary TV sets
• IPTV market revenues
• IPTV revenues
• Pay vs free IPTV subscribers

• Iceland IPTV Profile
• Iceland IPTV market profile
• Market shares of primary TV sets
• IPTV market revenues
• IPTV revenues
• Pay vs free IPTV subscribers

• Ireland IPTV Profile
• Ireland IPTV market profile
• Market shares of primary TV sets
• IPTV market revenues
• IPTV revenues
• Pay vs free IPTV subscribers

• Italy IPTV Profile
• Italy IPTV market profile
• Market shares of primary TV sets
• IPTV market revenues
• IPTV revenues
• Pay vs free IPTV subscribers

• Latvia IPTV Profile
• Latvia IPTV market profile
• Market shares of primary TV sets
• IPTV market revenues
• IPTV revenues
• Pay vs free IPTV subscribers

• Lithuania IPTV Profile
• Lithuania IPTV market profile
• Market shares of primary TV sets
• IPTV market revenues
• IPTV revenues
• Pay vs free IPTV subscribers

• Netherlands IPTV Profile
• Netherlands IPTV market profile
• Market shares of primary TV sets
• IPTV market revenues
• IPTV revenues
• Pay vs free IPTV subscribers

• Norway IPTV Profile
• Norway IPTV market profile
• Market shares of primary TV sets
• IPTV market revenues
• IPTV revenues
• Pay vs free IPTV subscribers

• Poland IPTV Profile
• Poland IPTV market profile
• Market shares of primary TV sets
• IPTV market revenues
• IPTV revenues
• Pay vs free IPTV subscribers

• Portugal IPTV Profile
• Portugal IPTV market profile
• Market shares of primary TV sets
• IPTV market revenues
• Pay vs free IPTV subscribers duplicate
• IPTV revenues

• Romania IPTV Profile
• Romania IPTV market profile
• Market shares of primary TV sets
• IPTV market revenues
• Pay vs free IPTV subscribers
• IPTV revenues

• Russia IPTV Profile
• Russia IPTV market profile
• Market shares of primary TV sets
• IPTV market revenues
• IPTV revenues
• Pay vs free IPTV subscribers

• Slovakia IPTV Profile
• Slovakia IPTV market profile
• Market shares of primary TV sets
• IPTV market revenues
• Pay vs free IPTV subscribers
• IPTV revenues

• Slovenia IPTV Profile
• Slovenia IPTV market profile
• Market shares of primary TV sets
• IPTV market revenues
• IPTV revenues
• Pay vs free IPTV subscribers

• Spain IPTV Profile
• Spain IPTV market profile
• Market shares of primary TV sets
• IPTV market revenues
• IPTV revenues
• Pay vs free IPTV subscribers

• Switzerland IPTV Profile
• Switzerland IPTV market profile
• Market shares of primary TV sets
• IPTV market revenues
• IPTV revenues
• Pay vs free IPTV subscribers

• Sweden IPTV Profile
• Sweden IPTV market profile
• Market shares of primary TV sets
• IPTV market revenues
• IPTV revenues
• Pay vs free IPTV subscribers

• UK IPTV Profile
• UK IPTV market profile
• Market shares of primary TV sets
• IPTV market revenues
• IPTV revenues
• Pay vs free IPTV subscribers