IPTV to struggle in the short term

The IPTV market will grow to 48.8 million subscribers by 2010 but companies will still struggle to turn that into a big profit, according to an industry analyst.

Despite the eight-fold increase in users between 2006 and 2010, Gartner claims that carriers will struggle to turn IPTV into a mainstream subscription TV platform on a par with established cable or satellite services.

"Global IPTV revenue during the period will grow from US$872m [£464m] in 2006 to a still relatively modest US$13.2bn [£7bn] by 2010," said Elroy Jopling, research director for Gartner's Consumer Communication Services group.

"IPTV will not be a panacea to replace diminishing voice revenue for carriers, but in the medium term it can be a powerful tool for carriers in helping to retain customers on existing voice and broadband services."

Gartner maintained that carriers must understand the opportunities before them if they are to take advantage of IPTV.

"Carriers need to look beyond the immediate revenue opportunity to understand the longer-term importance of IPTV," said the report.

"This is because IPTV is not a single service; it is in reality a new carrier distribution platform over which many consumer communication and entertainment services can eventually be offered."

Gartner estimates that IPTV subscribers will more than double in the next year from an expected 6.4 million in 2006 to 13.3 million in 2007, thanks to the launch of new services.

However, Gartner defines IPTV as the delivery of video programming over a carrier's managed broadband network to a customer's TV set and does not include streaming media over the internet to a PC.