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IPTV Likely to Generate
Significant Revenue within First Three Years of Service, Accenture
Survey Finds
Other Topics: IP Video Gateway,
IPTV Chinese Service
CNW
February 5, 2007
Confidence in long-term Internet Protocol TV potential remains
strong.
Toronto, Canada -- More than half of communications industry
executives believe that Internet Protocol Television (IPTV) can
generate significant revenue within the first three years of
service, according to findings of a survey released today by
Accenture (NYSE: ACN) and the Economist Intelligence Unit (EIU).
The survey of nearly 350 executives from telecommunications,
broadcasting and media companies across 46 countries in the
Americas, Europe and Asia revealed industry-wide confidence in the
longer-term outlook for IPTV, with 60 percent believing that IPTV
will generate significant revenues within three years. |
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However, confidence
in the short-term outlook remains mixed, with slightly more than
half (52 percent) of respondents saying they are not confident in
the ability of IPTV to generate significant revenues within the next
12 months. On the other hand, one-fifth (20 percent) of respondents
said they are confident or very confident, and more than one-quarter
(28 percent) said they are somewhat to fairly confident, that IPTV
will generate significant revenues within 12 months.
"The business case for IPTV, its value-added benefits and its
potential remain strong," said Dan Elron, managing director for
Accenture's Communications practice. "In the long-term, the key to
achieving high performance through IPTV is to be visionary,
ambitious and open to innovation from many sources. For the shorter
term, the key is to quickly adapt to consumer feedback and jump over
technology hurdles."
When asked what they believed would be the principal revenue source
for IPTV, about half (46 percent) of the industry executives
surveyed selected advertising. However, network operators, as a
subset of all respondents - which included equipment vendors,
consumer electronic companies, content providers and
broadcasters/studios - disagreed, with three-quarters (74 percent)
of network operators saying they believe that subscription fees for
premium content will provide the largest recurring revenue stream,
followed by basic content subscription fees and then advertising
fees.
"This difference in opinions reflects the broad uncertainty around
how media will be delivered and what customers will be willing to
pay for," said Elron. "Carriers are used to subscription revenues
and believe that the IPTV experience will soon be comparable to or
even better than current video offerings, whereas media executives
are more cautious and skeptical of a scenario where a new revenue
stream is created so rapidly. The reality is that both revenue
streams will be important, but the challenge will be to harness the
power of this new technology to create a new video experience that
makes consumers and advertisers willing to pay more than they do
today."
When asked to identify reasons for pursuing the IPTV market, the
greatest number of respondents (42 percent) cited new revenue
streams, followed by acquiring new customers (28 percent) and
increasing sale of broadband access connections (21 percent).
Overwhelmingly, executives believe that discounted pricing through
service bundling will be the primary motivation behind consumer
spending. Nearly two-thirds (64 percent) of all respondents - and
three-quarters (74 percent) of network operators surveyed - said
they believe that discounted service bundles provide the greatest
enticement to buy IPTV. The ability to move content between devices
was also cited as an important enticement, selected by 38 percent of
respondents, as was the convenience of a single bill for multiple
services, selected by 31 percent of respondents.
Yet there are obstacles to IPTV adoption. One-quarter (25 percent)
of respondents said that the primary short- term obstacle to IPTV
adoption is a quality-of-service issue relating to unproven
architectures, low bandwidth and other technology issues. The same
number (25 percent) said they believe that quality-of-service issues
will be resolved over the next three years, leaving stiffer
competition from alternative TV providers as the toughest challenge
to the adoption of IPTV. Another challenge to IPTV adoption, cited
by 19 percent of respondents, is high subscription fees due to the
high cost of network access and equipment.
When asked which types of companies are most likely to generate
revenue from IPTV, the vast majority (87 percent) of respondents
selected content providers, followed by telecommunications providers
(72 percent). Not surprising, more than two-thirds (69 percent) of
respondents said that traditional broadcasters have the least to
gain from IPTV, a view held strongly by respondents across all
company types, including broadcasters themselves.
For more details of the study, please visit www.accenture.com/iptvmonitor3
About the Survey
The Economist Intelligence Unit surveyed 341 media executives in
October 2006 to identify their beliefs about the potential of IPTV.
The survey, conducted via email, covered 46 countries in three major
geographic regions, with 35 percent of respondents based in Europe,
33 percent based in the Americas and 32 percent based in the
Asia-Pacific region. Forty-six percent of respondents were C-level
executives, and the other 54 percent consisted of senior managers
such as heads of business units and directors of marketing or
planning. Companies represented included fixed network operator /
services providers, integrated fixed-wireless telecommunications
operators, cable / satellite network operators, telecommunications
equipment manufacturers, consumer electronics manufacturers, TV
broadcast networks, film studios, other content providers (e.g.,
news, music, games) and value-added services providers (e.g.,
billing, customer care), among others.
Editor's Note: News Briefing Conference Call
Accenture will hold a news briefing conference call at 11 a.m. EST
today with Dan Elron, managing director of Accenture's
Communications practice, and Accenture senior executives Ray Dogra,
Larry Socher and Arjang Zadeh. To participate, please dial +1(888)
428-4480 (+1 (612) 234-9960 outside the United States, Puerto Rico
and Canada) and enter access code 862076. A replay of the news
conference will be available for 48 hours beginning at 2:30 p.m. EST
today. To access the replay, please dial +1 (888) 428-4480 (+1(612)
234-9960 outside the United States, Puerto Rico and Canada) and
enter access code 862076.
About Accenture
Accenture is a global management consulting, technology services and
outsourcing company. Committed to delivering innovation, Accenture
collaborates with its clients to help them become high-performance
businesses and governments. With deep industry and business process
expertise, broad global resources and a proven track record,
Accenture can mobilize the right people, skills and technologies to
help clients improve their performance. With approximately 146,000
people in 49 countries, the company generated net revenues of
US$16.65 billion for the fiscal year ended Aug. 31, 2006. Its home
page is www.accenture.com.
About the Economist Intelligence Unit
The Economist Intelligence Unit is the business information arm of
The Economist Group, publisher of The Economist. Through our global
network of about 700 analysts, we continuously assess and forecast
political, economic and business conditions in 200 countries. As the
world's leading provider of country intelligence, we help executives
make better business decisions by providing timely, reliable and
impartial analysis on worldwide market trends and business
strategies. |
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