"Nearly half" of European IPTV households currently receive service for free
June 9, 2008 - Nearly half (40%) of European households receiving IPTV are using the service for free, as it is bundled at no extra cost with a broadband and/or telephony package, according to new data from market research firm Screen Digest.
The data, taken from the firm's TV Intelligence service, found that IPTV is not being offered for free by service providers to just cut churn, but also to gain data customers. "The primary intent behind most of the major IPTV services is to add new broadband subscribers - not to drive profits or even act as a churn reducer," said Richard Broughton, analyst for Screen Digest. The company goes on to point to IPTV providers striking deals with satellite TV providers to carry their content, such as TeliaSonera's recent deal with Viasat, as proof that IPTV operators are "not overly concerned about making a profit from IPTV" but rather focus on broadband.
The research also projects that over the next five years a rise in competition will increase consumer options and the potential for cut-price TV offers and mean that nearly one fifth of French homes will be using IPTV as their main method of TV viewing by 2012. Meanwhile, on the other side of the channel, roughly 6% of UK homes will be watching IPTV within five years, continuing the trend started by BT Vision's subscriber take-up and the availability of free content and/or features on IPTV services, such as PVR functions, that require subscription or STB purchase with rivals Sky and Virgin Media.
By 2012 the five countries of the UK, France, Germany, Italy and Spain will contribute "the majority" of IPTV subscribers in Europe, however other important markets are emerging in the region, including the Baltic Countries, Scandinavia, Slovenia, Slovakia, Croatia and the Czech Republic. Broughton concludes: "In all of these markets, the wide availability of triple-play and relatively low-cost TV options will ensure that consumers begin to enjoy a better deal for their TV. Both in terms of price and functionality, households across Europe will see their pay-TV options increasing substantially over the next few years."
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