Pyramid Research has a new report out on IPTV in Asia, where it concludes mostly that momentum is building there for the Telco technology, but that profitability may be a ways off.
While it’s not our job to warn you off buying any particular report and given that this one is only 13 pages and costs just $595 it may well be just what you need, but most of the work is built around two case studies which it says are in Hong Kong and South Korea.
We guess that the Hong Kong study will take in PCCW, because that’s what we all do in IPTV and quad play, because it’s a remarkable story of how PCCW has gone about broadening its appeal in IPTV, as well as first selling and then buying a cellular operator, and pushing its content wares in a clever and original manner ‘ buy content, and watch it on any of three screens, to create a full quad play.
We also guess that in Korea the study might take in the SK Telecom partner Hanaro, which SK has a big stake in, and which it was seeking to acquire when we last looked.
SK Telecom needs Hanaro to compete head on with long term rival incumbent Korea Telecom, which has far less mobile customers, but is the dominant broadband supplier in Korea and controls about 92% of the fixed line business there. Hanaro’s growth in IPTV has also been legendary.
But while you may pick up lots of new ideas about how to successfully go about the process of IPTV from these two operations (if they are indeed the two case studies) this does not sum up IPTV in the region and a deeper look at how NTT in Japan, and how China is progressing are probably what you need if you want to plan a strategy for the region ‘ after all Hong Kong only has a population of 7 million, and South Korea of 49 million, and in Korea the government had banned broadcast IPTV until last year. They are both atypical, government constrained, special cases.
Pyramid concludes that Asia Pacific has some of the most successful IPTV operators globally, and rollouts continue throughout the region, and says (guess what?) there are three key challenges: regulatory, content and technology costs.
The Pyramid press release says, ‘Typically, regulatory issues come first, then the mammoth challenge of valuing and procuring content along with technology issues ‘ both of which can affect subscriber take-up and bottom lines.’
It does point out that right across the region regulators (such as in China) are split between broadcast regulators and telecom regulators so no-one is quite sure who owns IPTV ‘ and this has to be solved first before IPTV can take off. Well it might be worth the price of the report for that insight, true as it is. The report also says that content acquisition is prohibitive due to the habit of charging up front costs, which means that only the bigger players can even look at providing IPTV.
The report also talks about a lack of infrastructure, which is not too apparent in Korea, with its 100 Mbps broadband lines, but it is likely that broadband in not IPTV ready even there, with its need for QoS and multicast routers.
But the final advice of the report is a little worrying ‘ saying that all these costs are worthwhile because the region has lower churn and higher cash flows. Well, take India for example, where there are now about 6 satellite TV operations signing up customers like there is no tomorrow, that kind of environment means that low churn will not last. And there are many other satellite TV operations starting or already in play across Asia Pacific, making the overall Pay TV market more complex than that which can be addressed in a 13 page report.