The number of households actively paying for IPTV subscriptions is projected to surge over the next five years, according to industry analyst Digital TV Research.
Strong expansion across the Asia-Pacific region will drive growth from 35 million paying IPTV households at the end of 2010 to more than 155 million by the end of 2016—an increase of roughly 120 million subscribers. About 85 million of those additional subscribers are expected to come from Asia Pacific, with China forecast to see a ten-fold rise in IPTV subscribers during this period.
Digital TV Research’s study examines IPTV development in 73 countries. The research is grounded in detailed, bottom-up reporting compiled by veteran analyst Simon Murray, drawing on information from pay TV operators, equipment manufacturers, content owners, regulators, industry associations, local consultants, banks and other local sources.
The forecasts account for a wide range of influences, including industry investment levels, government policy, market maturity, and national economic trends.
Global IPTV penetration was only 2.6% of TV households at the end of 2010 but is expected to climb to 10.5% by 2016. Regional penetration is forecast to reach about 12% in Asia Pacific, Eastern Europe and Western Europe. By 2016, the highest IPTV penetration is projected to be in Cyprus, at around 42%.
“By 2016, 83% of paying IPTV subscribers will take triple-play packages (TV, broadband and telephony), with 10% on dual-play plans (TV and broadband) and just 7% subscribing to standalone TV,” Murray commented.
IPTV revenues are forecast to rise from about US$6 billion in 2010 to roughly US$17 billion in 2016, and they have grown from under US$1 billion in 2006. The United States is expected to remain the largest single IPTV revenue market in 2016, accounting for about one quarter of global IPTV revenues, down from approximately one third in 2010.
Murray noted that in developed markets there is downward pressure on average revenue per user (ARPU) as pay TV competition intensifies and digital terrestrial television (DTT) exerts influence.
He added that ARPU is also being pushed down as cable operators and telcos migrate customers into dual-play and triple-play bundles. As a result, although triple-play subscribers will represent the majority of paying IPTV households, their bundled pricing means they are expected to generate about 73% of total IPTV revenues in 2016—less than their share of subscribers—because bundled packages reduce the standalone TV pricing component.