Everything's going gangbusters for IPTV these days. The number of rollouts in Asian markets is growing. Pick an analyst - any analyst - and all the projections point up. Point Topic put the number of IPTV subscribers in June 2007 at 8.2 million. Around five million were in Europe, and 2.2 million in Asia. But analyst firm MRG reckons Asia will actually overtake Europe as the biggest IPTV region as early as 2012. That'll be thanks in no small part to markets like China and India, where IPTV is already running via China Netcom (via partner BesTV, owned by Shanghai Media Group) and MTNL (via partner Time Broadband India).
Meanwhile, PCCW has continued to up its game with a raft of new service adds, including online shopping and, of course, the first high-definition broadcasts in Hong Kong. PCCW seems out to prove that everything you've heard about IPTV - a ticket to churn-stopping revenue-generating cross-platform quad-play - is true.
There's only one small problem - the buzz over IPTV is already starting to fizzle a little.
Part of the problem can be summed up in the recent findings of another analyst firm - Canalys - which says that while IPTV subscriber numbers may be going up, telcos are actually losing buckets of money on rollout costs and other factors, and will continue to do so until at least 2012.
That in itself isn't so bad - you have to spend money to make money, as they say - but here's a few other research findings worth relaying.
In early December, Nokia published research claiming that almost 40% of respondents watch their TV on the internet. According to Nielsen NetRatings, they were most likely watching YouTube and the video sections of portals like MySpace, AOL, MSN and Yahoo (in that order). And according to ComScore, in September 2007 people were probably watching at least two videos a day on their PCs.
This doesn't mean that YouTube is going to kill off TV as we know it. But it does mean that viewer habits are changing drastically. This isn't news to anyone - industry experts have been pointing to trends like time shifting, place shifting, multitasking (such as doing IM and web surfing while watching TV) as evidence that the TV audience is undergoing a dramatic shift in consumption behavior. But look at what's driving that shift - in essence, it's the net as interpreted by Web 2.0.
Actually, it's more than that. Consider that Sony's PS3 game console now doubles as a set-top box, and Microsoft's Xbox 360 will follow suit after we go to press (and possibly by the time you read this). What impact will that have on IPTV business models‾
Even better, look at Joost, the P2P video network that went out of beta in October. Think Joost won't affect IPTV rollouts‾ Guess again. For a start, it's advertising driven. If it builds up a big enough library, it could well end up offering on the web for free what IPTV operators are planning to offer via VOD download fees or subscription rates. This may be less of a factor in emerging markets where TVs outnumber PCs. On the other hand, mobile phones outnumber TV sets in some of the same markets - will mobile TV end up competing with IPTV for subscribers or advertising impressions‾
IPTV proponents often respond that they can offer a lot of the same things that can be had on the web, and they can do it across multiple platforms. The trick, though, is how to convince users to switch off their PCs long enough to switch to the STB. Home networking gateways may be the key to this - so long as they're out-of-the-box and easy to use. That said, if the object of IPTV is to not simply imitate the cable guys, why would you want to simply imitate the Joost guys‾
I'm not saying IPTV is doomed, and I'm certainly not saying that broadcast TV has no future. It just seems that wherever I hear IPTV being discussed, it's often positioned against cable TV and not internet video services, which are the very services that are going to play a major role in reshaping the TV audience. Telcos that don't tune in to this now will find themselves wishing they had later.