IPTV is a digital TV service that is delivered through Internet protocol over a broadband connection.
While IPTV has been slow to catch on because of limited market penetration and slow network connection speeds, the report states that the North American market will increase 40-fold between 2005 and 2009.
Several adult companies have started offering videos via IPTV, including 3 Vision Entertainment, Wicked Pictures, New Sensations, Digital Sin, Zero Tolerance Entertainment and Third Degree Films. All have partnered with Entice.TV to offer adult content via a broadband connection and a standard computer video cable.
“Service providers expect huge returns from IPTV, and they are investing heavily in IPTV infrastructure to ensure those returns,” Jeff Heynen, directing analyst for IPTV at Infonetics Research, said.
While worldwide IPTV equipment revenue only topped $400 million in 2005, Infonetics expects that number to surpass $6 billion by 2009, with $38 billion in service revenue.
According to the report, IP set-top box revenue currently accounts for 42 percent of IPTV equipment revenue as providers purchase MPEG-2 capable boxes. Infonetics estimates IP set-top box sales will nearly double every year over the next three years.
A recent poll by Harris Interactive showed that 56 percent of U.S. adults know about IPTV and would be interested in adopting it for use on their TVs and home PCs. The study said the subjects interest stems from the ability to save money (IPTV is predicted to cost 42 percent less than cable or satellite); the ability to utilize the on-demand feature; the ability to receive more programming content; and the ability to utilize high-definition viewing, digital video recording and interactive program guide.
While the U.S. market has been slow to grow in the IPTV sector, Haynen said this is because most telecoms are focusing on building the networks and infrastructure before the competition heats up on the retail end.
“Right now, they’re focused on transport infrastructure,” Haynen said. “Upgrading their access networks with higher-bandwidth ADSL2+, VDSL2, and FTTH platforms, and adding IP edge routers and Ethernet routers and switches to handle the expected traffic demands of the escalating numbers of IPTV subscribers.”
