By year end, the Asia-Pacific Internet Protocol television (IPTV) market will reach 9.4 million subscribers, a 51 percent growth from last year's 6.27 million subscribers, according to a new report released Wednesday.
Conducted by Frost & Sullivan, the study also revealed that by end-2009, the APAC market will account for 37.6 percent of global subscribers, a close second after the world's oldest IPTV market, Western Europe, which has 38.3 percent of global subscribers.
The research house estimated that the IPTV subscriber base in the region--comprising 14 APAC countries including Japan--will grow at a CAGR (compound annual growth rate) of 24.6 percent annually between 2009 and 2014, and will reach 23.5 million subscribers by end-2014.
The report noted that only eight APAC nations--China, South Korea, Hong Kong, Taiwan, Japan, Thailand, Singapore, India--had commercial IPTV in 2008. In late 2009, Vietnam launched its IPTV services, while Malaysia, Indonesia, Australia and New Zealand are all expected to roll out IPTV services in the next 12 months, with the Philippines last in line with a 2011 deadline.
According to the report, IPTV has yet to become a major pay TV service in most of APAC, apart from Hong Kong, Taiwan, South Korea, Singapore and China. In Hong Kong, IPTV has a 54 percent market share in the pay TV platform, while South Korea's success lies predominantly in video-on-demand services.
However, Adeel Najam, industry analyst at Frost & Sullivan, believes IPTV will pick up as high-speed broadband projects materialize. "After fiber deployments, service providers must offer services like IPTV to maximize revenue potential and return on investments," he said in a press release.
Among the key considerations for IPTV's success are broadband penetration levels, content and a low pay TV presence, said Najam.
With regard to the latter, he expects 62 percent of IPTV subscriber net additions from now until 2014 to come from emerging markets where pay TV players such as cable operators have yet to make a significant impact. These markets include China, Indonesia, Vietnam, India, Thailand and the Philippines. However, he added that adoption in these countries will be restricted to urban areas where high-speed broadband networks are present.
Content wise, he cited the example of Hong Kong's PCCW, attributing its success to the right mix of premium and local content. He added that the telecommunication enterprise's "now TV" service is notably the world's fifth-largest IPTV operator and Hong Kong's leading pay TV service provider.
"With the right content strategy, PCCW not only managed to capture more than 30 percent of Hong Kong's highly competitive pay TV market within the first two years, but has now tripled its average per user revenue and kept subscriber churn to under one percent," said Najam.
"Exclusive content, wherever local regulations permit, will give operators a leg up in the game," he said, citing Singapore Telecommunications' (SingTel) recent win for sole broadcast rights to three seasons of EPL.
"The exclusivity deal may not be enough to topple Singapore's dominant cable TV operator, StarHub, anytime soon, but it clearly gives SingTel a skin in the game and is likely to earn the telco a respectable number of IPTV subscribers," observed Najam.