Funding for UK IPTV projects is being withheld because of the presence of YouView, according to a leading corporate finance firm.
Avista Partners says UK investment in the IPTV sector fell by 94% in the first 12 months since Project Canvas was originally announced in September 2008, and 99% in the second 12-month period.
In the 12 months prior to its unveiling by the BBC, deals with a value of almost $35 million were made in the sector in the UK. In the two years since this announcement, investment has collapsed to just US$2.5 million with US$2.1 million in the first 12 months post Project Canvas news and US$0.4 million in the second 12 months post Project Canvas news.
In contrast, the US has seen a dramatic growth in private investment for IPTV ventures. Prior to September 2008, deals with a value of over $229m were made, subsequently capital deals amounting to over US$530m have been completed.
“The UK has witnessed a dramatic fall in private investment for IPTV-based businesses since Project Canvas was first announced,” comments Paul
Heydon, MD of Avista Partners. “It?s difficult to lay the blame on the economic crisis for this, especially when directly comparing the extreme buoyancy of US investments in this sector for the same period. The UK has often led the world in exciting technological TV advances and there?s certainly no lack of innovation or invention in this new market. Yet it?s clear the collective power of the companies behind Project Canvas is a major cause for concern for investors looking at private IPTV businesses in the UK.”
It should be noted that the two principal operators of managed IPTV services in the UK, BT and Talk Talk, are both shareholders in the recently formed YouView Ltd. While Talk Talk has been silent on its plans for the former Tiscali TV, BT is pressing ahead with its linear TV project that will see more content distributed through its own pipes rather than relying on the DTT network. Orange dropped plans for a UK IPTV service in November 2008, while plans from O2 and Vodafone have so far failed to materialise, the latter expressing concerns that it could not make its service distinctive enough.
The lengthening list of YouView objectors has now been joined by the ISBA, the advertisers trade body.