Internet Protocol TV Emerging, but Slowly in the US

Implications: A new report by the Gartner Group details strong growth in both IPTV households and revenues through 2012, but most of the growth is happening in Europe.

Analysis: In the United States, most people pay for their television through either a cable or satellite subscription.  IPTV or Internet Protocol Television is yet another platform to reach audiences, and new projections from the Gartner Group indicates the nascent technology is growing.

Key data points:  A rise in global IPTV households to reach 2.8% by 2012, and revenues to reach $4.5 billion this year (2008).  These numbers show strong double digit growth, but most of the action is happening in Europe (primarily in France, Spain, Belgium and Sweden), although North America is growing but just not as fast.

It is important to understand how Gartner defines IPTV:  IPTV is a managed broadband network which delivers high picture-quality television and video content to a user's TV set via a set-top box. Content delivered over the Internet or only to a computer is not included (quoting from the Reuters article here).  So, it is important to recognize that when we watch videos on YouTube for example, that is not the same as IPTV.  Gartner considers IPTV in much the same way as a cable or satellite description.

Here in the US, the key IPTV providers are FiOS, Max, DVS, NexTV.  While I don't have access to the full report, its a safe bet that most of the growth here in the US is attributed to Verizon's FiOS' system.  AT&T's U-verse is also making inroads as well, but faced a much later start than Verizon.

The big challenge in the US for IPTV is of course competing against the big cable providers like Comcast and Time Warner. But both Verizon and AT&T are aggressively touting triple-play packages and discounting rates, making this a very competitive landscape.

Going forward the big question for me is how much IPTV will cannabalize subscribers from existing services?  And how fast can it be deployed.  I would love to have it in my neighborhood, but it is not available yet.