IPTV's Race Around the Globe

“That is what drives people here: the kind of bundles they can get; the combination of video, voice and data; the pricing packages; how many channels are offered; how many HD channels are offered; and whole-home [digital video recorder] kind of applications seem to be on the rise as more people have more TV sets per household,” Stein said. “So the idea of connecting them is more prevalent here. They are more focused on those kinds of capabilities and haven't done that many interactive features, although they are starting to poke through.”

Content acquisition has been the biggest challenge both in Europe and in the U.S., said Juan Vela, director of product marketing for Occam, an access equipment provider. From Occam's perspective, traffic is one issue that is immune to geographical differences. Whether it's an encoder built for the U.S. or Europe, as long as it's MPEG traffic, Occam can transport it. But what the traffic is and where it comes from is different depending on which carrier the vendor is working with.

“There's much more of a wholesale model when you get outside U.S. barriers,” Vela said. “That seems to be a model that works in other regulatory environments, but in the U.S. it hasn't taken root. Regulatory is not the only issue, but just look at what happens in every state right now if you want to be a video provider: You have to apply for a franchise license based on a particular community at a time. That becomes a cumbersome effort for small- to mid-sized carriers. Even for large carriers it is difficult to obtain those licenses in a timely and cost-effective manner. It is a challenge — it's not the only one, but it is a challenge.”

Regulatory constraints are one issue that has held back parts of the Asian market from taking off, including Korea, said Robert Winters, chief marketing officer for Shenick. Only this year has the Korean government allowed broadband operators to compete against the broadcasters using IP pipes. Yet while Europe's subscriber size is still dominant, Asia subscriber's base will nearly equal Europe's in 2012, according to a 2008 MRG study. Through rapid urbanization and an expanding middle class and booming economy, Asia is likely to expedite its IPTV rollouts at a pace not yet seen.

“I think there is a lot of potential in the Far East, primarily Korea, Japan and Hong Kong, because of the density,” Stein said. “The amount of bandwidth that's available to each home is higher than it is here or than in Europe. That provides for potentially more interesting services. We are looking for more rapid growth there and eventually more rapid growth in China.”