60 million IPTV subscriptions in the EU by 2020

The number of IPTV subscriptions in the 27 countries of the EU is set to treble by 2020 according to the latest analysis from Point Topic. The IPTV global subscriber base has now passed 50 million customers, and in the largest IPTV market, France, more than 50% of its broadband customers now subscribe to IPTV.

“We’re projecting just over 160 million broadband subscribers in the €27 by 2020 and just over one in three will take an IPTV subscription,” said Oliver Johnson, CEO at Point Topic, in a statement.

Johnson also added that IPTV take-up in Europe has been very different in different countries: “The success of IPTV depends primarily on two factors. Firstly is it available, not only the physical network but at a price the consumer can afford? Where the cost and the link are suitable there is demand for IPTV as we’ve seen in France. However in many markets not only are cost and availability significant barriers but the incumbent TV services are well entrenched.”

Many of the European markets, particularly in the East, have developed their own TV delivery systems over cable networks. Often small, local and sometimes non-profit organisations serve a particular community and while they do not have the same reach as the larger players they are proving to have a loyal subscriber base.

“Operators and ISPs are trying to tackle these barriers. Sometimes a broadband subscription will actually be priced higher than a service bundled with IPTV, a classic tactic to try and gain market share,” said Johnson.

He added: “The success of IPTV in France compared to other countries in Europe and worldwide can’t be attributed to a single reason. A number of conditions exist which has made the diffusion of IPTV through the market much easier and quicker than in others, perhaps the main driver has been competition.

“France, with Free Internet as a good example, has much clearer and more transparent tariffs for IPTV and that has not only earned the consumers trust but allowed them to align the value they derive from the services with the amount they pay. It’s a simple equation but not the natural approach we’ve become used to from operators. Often the price isn’t obvious for each bundle constituent, and there are a number of reasons for this, but the end result is that the consumer resists purchase far more than they might if they felt they had better information.”

Point Topic has analysed over 2,000 standalone and bundled tariffs from around the world in 2011 and estimated how much extra ISPs generally charge to add IPTV to a subscription.

“We estimate that a consumer will pay $66 (€48.5) per month on average today for a broadband plus IPTV service. If we split out the broadband charge we get revenues today of just over 5.3 billion dollars a year for IPTV services rising to 14.8 billion in 2020 in the €27,” said Johnson.

Then there’s the matter of the over the top (OTT) suppliers.

“The entrance of Google and Apple in particular into the internet TV market could be a game changer. Along with services like Netflix, Hulu and offerings from other OTT suppliers, we could see a significant increase in competition and, hopefully for consumers, more clarity and lower prices,” concluded Johnson.

Also according to Point Topic, 9% of the world’s broadband homes now subscribe to an IPTV service, an increase from 7.8% in June last year. Europe is still the leading IPTV region with strong growth in France, Romania, Russia and Belarus. The competitive and regulatory environment coupled with a relatively high broadband penetration mean that all these markets show good prospects for future growth. Asia has increased its market share by almost 5% in the last 12 months and shows signs of accelerating in a number of markets. Asia is likely to overtake Europe in 2012 in terms of IPTV subscribers.

France still leads the IPTV market with 11.05 million subscribers, representing over 50% of French broadband lines. In contrast, China’s 10.5 million subscribers are equivalent to around 7.6% of lines in the market. Many IPTV subscribers are in Hong Kong and Shanghai, so there is considerable room for expansion, as Hong Kong on its own has one of the highest IPTV penetrations anywhere in the world.Growth in the remainder of the Top 10 IPTV nations is healthy, with all markets apart from Spain reporting significant double-digit growth in the year to end June 2011.