BUSINESS INSIGHTS The Future of TV The evolving landscape of HDTV, IPTV and mobile TV New Technology Report - Published October 2007 High definition households in Europe and the US, 2006-2010 Source: The Future of TV “The US is likely to retain its significant lead over Europe with regard to the penetration of HD services by the end of the decade. By the end of 2010, over 50 million US households will be viewing HD programming, representing almost 45% of all TV households across the country. In contrast only 12m (or 8% of TV households) in Europe will have made the transition by this time...“ Identify the competitive landscape, growth opportunities and the impact of new technologies on the broadcast sector with this new report... Business Intelligence for the Technology Industry Business Insights' portfolio of technology management reports are designed to help you make well informed and timely business decisions. We understand the problems facing today's technology executives when t rying to drive your business forward, and appreciate the importance of accurate, up-to-date, incisive product, market and company analysis. We help you to crystallize your business decisions. The strength of our technology research and analysis is derived from access to unparalleled databases and libraries of information and the use of proprietary analytic techniques. Business Insights reports are authored by independent experts and contain findings garnered from dedicated primary research. Our authors' leading positions secure them access to interview key executives and to establish which issues will be of greatest strategic significance for the industry. Our technology portfolio of reports can be used across a wide range of business functions to assess market conditions and devise future strategies. The order form on the back of this brochure lists recent t itles available from the categories of CRM, Strategy, eCommerce, Information and Communications Technology and vertical markets including Finance and Healthcare. Some key findings from this report... Mobile broadcast TV subscribers • There has been a significant reduction in traditional media use since 2005, with the largest audience declines in TV, falling by 17% Asia-Pacific and national newspapers by 14%. • The key driver of European digital TV uptake to 2010 is expected to be digital-to-terrestrial services. It will to drive uptake to 109m by the end o f 2010, compared to 78m in the US. • Digital cable will drive growth in the US by 2010, closely followed by digital satellite. Unlike Eur ope, digital terrestrial is not expected to be a significant digital TV plat form in the US. Source: The Future of TV “The Asia-Pacific region, as a whole, is expected to be • Asia-Pacific is expected to be the largest market for mobile TV the largest market for mobile broadcast television and subscriptions with around 76.3 million subscribers by 2012, is expected to account for 76m mobile broadcast representing a CAGR of 51.7%. subscribers by 2012. This is roughly 49% of the total global market ...” • A key reason for companies to invest in IPTV solutions is to increase the revenue they get from each subscriber. Providing a broader range of services to which custome rs can be cross-sold increases revenue potential. The Future of TV The evolving landscape of HDTV, IPTV and mobile TV Digital TV households in the US Media consumption habits are changing as a result of the emergence of by platform, 2005-2010 multiple distribution platforms and the ever-growing number of channels available for accessing entertainment. With a significant migration from traditional media by the ‘networked generation’, it is increasingly essential for media companies, broadcasters, service providers, content providers, telecommunications and hardware manufacturers to understand the implications of these trends and to ensure that their products are flexible enough to meet changing consumer demands. The Future of TV: The evolving landscape of HDTV, IPTV and mobile TV is a new management report published by Business Insights that provides a Source: The Future of TV detailed analysis of market opportunities and growth sectors across the “In contrast to Europe, digital cable is expected to European, US and Asia-Pacific regions. This new report combines market drive growth from now until 2010 – although digital analysis and forecasts, technology reviews and strategic recommendations to satellite will represent almost the same opportunity provide an invaluable tool for understanding the current and future evolution over the forecast period. Unlike Europe, digital terrestrial is not expected to be a significant of the broadcast TV sector. digital TV platform in the US, and was overtaken Anticipate future changes in demand in the broadcast TV sector and by IPTV in 2007...” create more effective strategies to exploit this demand with the help of this new report. This new report will enable you to... Mobile subscribers including pre-pay • Identify and quantify future market growth opportunities by 2006-2012 geography and product type based on this report’s market forecasts to 2012 for key TV sectors across the European, US and Asia-Pacific regions. • Understand the key drivers and inhibitors in the broadcast TV market including changes in costs, consumer demand, security, technical challenges and content provision • Enhance the competitiveness of your products and services with Source: The Future of TV this report’s strategic recommendations detailing how to increase “A primary factor in the uptake of mobile broadcast Average Revenue Per User through the provision of new services. television is the adoption of mobile services. Because mobile broadcast television is often linked to a mobile • Assess the broadcast TV competitive landscape with this report’s operator and a subscription to its services, addressing insight into M&A activity, non-traditional entrants to the TV market and mobile penetration and subscriber uptake is essential changes in the technology landscape. to create a foundation from which to address mobile broadcast TV...” Key issues examined in this report... • How big will the IPTV mar ket be? By the end of 2010, IPTV will Mobile TV usage pattern account for approximately 8.6% of digital households in Europe and 7.5% in the US. • Which mobile TV format is likely to be widely adopted? HD television (HDTV) is gaining considerable traction across the globe. Consumers are upgrading their television sets to plasma or LCD flat screens as they demand greater quality in their TV experience. • What type of content is most likely to appeal to consu mers? Source: The Future of TV As expected, some broadcasters will support both formats “Current trials have established that mobile TV viewing depending on the type of content being transmitted. Pay-TV patterns differ from standard TV. While standard operators are also likely to support both formats in order to provide broadcast TV mainly takes place in th e evening, mobile high quality regardless of the format used by th e content provider. TV has its peak hours in the early morning, lunch time and in the early afternoon, clearly showing that mobile TV will become an individual activity mostly • Do consumers want mobile TV? Results from both secondary and based on commuting... ” primary research highlight that one of the biggest challenges facing players investing in the mobile bro adcast TV space is convincing consumers that the service is wo rth their while. Your questions answered... • Which mobile TV format will be the likely winner? Digital TV Market Comparison • How big will the digital TV market be in 2012? • What impact will mobile TV have on A verage Revenue Per User? • How do the drivers of digital TV differ between the US and Europe? • Will IPTV be a s ignificant revenue stream? • What does the entrance of non-traditional players mean for the Source: The Future of TV broadcast TV sector? “Europe and the US will see strong consumer adoption until the end of the decade. Satellite, Cable, Digital • How should service providers differentiate their products? Terrestrial Television and IPTV all offer distinct features with regards to interactivity and additional services. The rate of growth and th e regulatory nature of each • Which will be the biggest market for m obile TV? national market will continue to differ until the end of the decade, although the uptake of as a whole di gital television is expected to grow strongly...” Sample Information: ‘The Future of TV’ Chapter 2 The Rise of Digital TV Investment in new channels A recent survey of senior IT executives within 150 Figure 2.4: Proportion of IT budget invested into new distribution channels, 2007 broadcasters and content producers in North America and Western Europe highlighted that players are making substantial investments in new channels. As a whole, the survey results yield strong indication that service operators are primarily interested in expanding their product portfolio’s to incorporate new distribution channels. One of the biggest channels that players are interested in exploiting is the Internet, with over 56% of respondents stating that they are investing heavily into online distribution. The figure below illustrates results with regards to the level of investment respondents are looking to devote to new Source: The Future of TV distribution channels over the course of 2007. The survey illustrates that around 21% of broadcasters are investing heavily in alternative channels, allocating over 20% of their IT budget in this area. As a whole, around 84% of respondents are aiming to invest at least some proportion of their budget into alternative distribution channels over the next 12 months. The survey suggests that the industry is actively looking to new strategies to delivery content. This development can be directly attributable to the significant shift in consumer consumption habits and the rise of alternative television players such as Joost, Jalipo and YouTube. While content producers and broadcasters are potentially using these alternative channels as an economical means to boost reach and generate customer loyalty, traditional pay-TV operators are looking to create innovative services in response to boost their competitive positions. Enhanced content services There is little doubt that service bundling and expanded product portfolios are essential for survival in an increasingly crowded and aggressive marketplace. While this issue is important, it is equally as crucial to ensure content itself is used as a source for differentiation. Video-on demand (VOD) services and high definition (HD) content are at present used by key players as a method to create differentiation in the market. - 41 - Order this report today to find out more... Table of Contents CHAPTER 1: THE EVOLVING BROADCAST LANDSCAPE CHAPTER 4: THE EMERGENCE OF IPTV • Media in the 21st C entury • IPTV market overview - New business models - What is IPTV? - Broadband adoption and its impact on TV - Broad range of services • Competitive landscape • IPTV technology overview - The impact of M&A on the m edia sector - Digital Subscriber Line Access Multiplexer - Non-traditional competitors - Consumer equipment • Technology landscape - Middleware - Digital TV - Multicasting and unicasting - Video on demand (VOD) • Market drivers and inhibitors - High-definition TV - Drivers - Mobile TV - Improved compression and reduced hardware costs - Mobile TV subscriber forecast - Hardware costs are falling • The future of advertising in a digital world - Increasing uptake of broadband - Increasing competition between platforms CHAPTER 2: THE RISE OF DIGITAL TV - Boosting ARPU and reducing churn • Market overview - Inhibitors - Triple-play bundling - IPTV is relatively new and untested - Investment in new channels - Deployment costs - Enhanced content services - Lack of content relationships - Video on demand - Competing platforms - HDTV content • Market sizing - Operational efficiencies • Conclusions - Mobile TV • Market sizing CHAPTER 5: BROADCAST TV TO MOBILE - Europe vs US comparison • What is mobile broad cast TV? - By platform - The broadcast TV to mobile value chain - Europe • Market drivers and inhibitors - United States - Drivers • Conclusions - Consumer demand - Europe - Mobile phone penetration - United States - Single, multifunctional devices - New revenue stream CHAPTER 3: THE FUTURE OF HDTV - Inhibitors • HDTV market overview - Competition from other content services • HDTV technology standards - Consumer education - Compression technology - Technical challenges • Consumer electronics equipment - Handset capabilities - HD televisions - Content security - Commercial market vs consumer market - Mobile TV content - HD set-top boxes • Technology standards • Market sizing - DMB vs DVB-H vs MediaFLO - General - DVB-H - The United States - Digital Multimedia Broadcasting (DMB) - US satellite operators - MediaFLO - US pricing - ISDB-T • Western Europe - Summary • Conclusions Table of Contents (contd.) • Market sizing FIGURES - Global • Digital TV market comparison. 2005-2010 - North America • Simplified broadcast TV to mobile value chain - Europe • Mobile Broadcast TV subscriber forecasts, 2006 – 2012 - By country • Proportion of IT budget invested into new distribution - Asia Pacific channels, 2007 • Recommendations • Broadcasters IT budget priorities, 2007 - Pricing • High definition households in Europe and the US, 2006- - Option 1: flat fee for unlimited TV access 2010 - Option 2: pay-per-view • High definition households in the US, 2006 – 2012 - Option 3: charge per minute • HD households in Western Europe with CAGR, 2012 - Option 4: two-tier pricing model • European HDTV market development comparison, - Business model 2008 - Handsets • Top-level IPTV systems architecture - Audience • Compression technology developments have boosted - Lifestyle target the potential of IPTV services - Demographic targeting • Cable operators and telcos are providing an • Conclusions increasingly similar range of services • Offering video services can substant ially boost ARPU TABLES for telcos • European broadband penetration by household, 2006- • Incremental costs per IPTV subscriber ($) 2010 • IPTV uptake comparison: Europe vs. the US, 2005-2010 • Digital TV uptake comparison: Europe vs US, 2005- • Simplified model for mobile video consumption 2010 • Simplified broadcast TV to mobile value chain • Digital TV market development comparison, 2005-2010 • Mobile subscribers including pre-pay, 2006-2012 • Digital TV households by platform, 2005-2010 • Expandable screen on a mobile phone - Europe • Regional comparison of mobile broadcast TV - US subscribers, 2006 – 2012 • The most common HDTV display formats • European mobile broadcast subscribers by country, • Mobile broadcast TV subscribers 2006-2012 2012 - North America, • Major Asia-Pac markets comparison for mobile - Europe, 2006 – 2012 broadcast TV subscribers , 2006 – 2012 - Asia-Pac, 2006 – 2012 • Mobile TV usage pattern • Finnish trial sample distribution by age group FAX BACK TO +44 (0)20 7900 6688 or +44 (0)20 7551 9089 Website 1. 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