Good read, Europe leading in IPTV: “There are a

Good read, Europe leading in IPTV:
“There are a number of reasons why Europe is currently ahead of the U.S. in its IPTV deployments,” said Richard Broughton, an analyst at Screen Digest. “The first is simply the state of the competition — U.S. telcos typically face less regulation and fewer major competitors than their European counterparts. As such, there has been less pressure on them to roll out IPTV services; triple-play simply hasn't been necessary until recently. In Europe, where the broadband sector is more commoditized and extremely competitive, every ISP is constantly looking for ways to reduce the high levels of churn and boost subscriber additions. Broughton continued, "The second is that U.S. telcos are choosing to go for full pay-TV services. In Europe, IPTV services tend toward the budget end of the market. As such, they are a little easier to roll out en masse. In the U.S., the telcos are competing directly with the major pay-TV operators, and as such have had to be much more careful when considering how they roll out the services, what sort of content is available and how they market their offers.”

Broughton provided some figures to put things into perspective. “In terms of those IPTV customers who actually use the IPTV box, Europe will have roughly four times as many IPTV customers as the U.S. by the end of the year,” he said. “In terms of deployed boxes, Europe leads by even more — roughly double the number again. However, revenuewise, the gap narrows, with the U.S. looking to have made roughly half a billion euros (about $700 million) from IPTV subscriptions in 2007. Europe's figure is only two and a half times this.”

While Europe leads the U.S. overall, it’s important to note that the U.K. is behind the rest of Europe. As Broughton explained, “The U.K. is trailing much of Europe, and while some of this stems from the average consumer's reluctance to pay for TV (the nature of the U.K.'s TV license means that many consumers feel that they have already paid), the disparity is primarily due to the fact that the telcos have been so slow at rolling out IPTV. While the U.K. was one of the first countries in the world to use IPTV, the extent of the offer was limited by inadequate compression technologies and the state of the country's telecommunications lines. BT [British Telecom] also has issues with sending content across its network — the architecture of the system doesn't support broadcast content particularly well. As such, the company had to wait for Freeview to take hold before it could find a potential purchase-hold on the market.”