IPTV looking robust, wards off expected nosedive

More than 35 new IPTV operations began trials or deployment across the globe in the past six months, suggesting opportunity in the market despite the economic downturn and rise of alternative options for video. Only two trials took place in North America, with the majority occurring in emerging markets, but the US has done better than originally expected, according to Gary Schultz, chief executive officer of analyst firm Multimedia Research Group.

MRG actually had to increase its forecast for global IPTV subscriber growth, which it had lowered back in August when it last published the standings, Schultz said. Growth rates aren’t quite what they were a year ago, but they are still steady and respectable worldwide, he said.

“We think the telecom industry in general paid its major dues back in the last dot-com bust,” Schultz said. “The telcos themselves know how to pull in their belts quickly and keep their cap ex spending up. AT&T is an example. We were surprised they are keeping their cap ex budget around $18 billion. That doesn’t sound like an austerity budget to me. They will continue to build out. In general, we are pleasantly surprised that the industry has not taken a nosedive south.”

MRG this week released its March global IPTV market leaders report, which tracks the top 100 global vendors serving more than 700 IPTV service providers. The company concluded that subscriber growth is continuing, as reflected by increased deployments of IPTV products throughout the world.

MIDDLEWARE MARKET REMAINS CROWDED

Microsoft Mediaroom, AT&T’s middleware of choice, moved up in the global middleware and content protection rankings to second place, and captured the first place spot in video on-demand, where 16 other vendors compete. Each of the top 10 vendors had well over 1 million subscribers, according to MRG. Schultz said that this level of competition makes IPTV is more reflective of the mobile phone industry than ‘your father’s cable system.’

Middleware, a historically crowded market that many analysts expected to winnow to a few strong players, continues to be competitive with more than 22 companies vying for space. The big players – Microsoft, Alcatel Lucent, Ericsson, Thompson and Nokia Siemens – continue to dominant, but the smaller players are finding their niches or growing larger through acquisitions and mergers. Schulz said there won’t be just two huge middleware players like in the past. It is such an important market that players are in it for the marathon, not just the 100-yard dash.

“There are so many operators there that are really small, but they are hanging in there,” Schultz said. “We still think you’ll see a fair amount of [mergers and acquisitions] in the next 12 months. The economy helps the case for M&A because it drives down the price of the acquiree. I’m a little surprised we haven’t seen more in the last six months.”