Asia-Pac IPTV: a challenge, but worth it

Rose Major

While the Asia-Pacific region has the distinction of having the most successful IPTV operators globally, operators continue to face challenges in three key areas, acording to a new report from Research and Markets.

Regulatory constraints, access to content, and technology costs still dog the sector and telecom operators must invest heavily to gain subscriber market share, the report* finds. The region provides good lessons for operators faced with developing a business case for IPTV services and determining an appropriate strategy for long-term success.

Charles Moon, author of the report, says: "Typically, regulatory issues come first, then the mammoth challenge of valuing and procuring content along with technology issues - both of which can affect subscriber take-up and bottom lines.

"One of the most glaring problems surrounding IPTV has been the lack of any framework around the service, putting it in a gray area, with neither the telecom nor broadcasting regulators having clear oversight of the sector."

Initial investments required in order to acquire content can also be prohibitive for smaller players, says Moon. "To make matters worse, the entrenched position of cable companies in markets like Japan and South Korea make it even more difficult for new IPTV players to negotiate for content rights," he explains. "In addition to the lack of adequate infrastructure and the high cost of set-top boxes hindering adoption, the fight to defend market share is intensifying."

But IPTV is worth the ight, the report concludes. "We believe the long-term opportunities that IPTV brings outweigh the short-term risks," Moons says. "The promise of media, and the escape it provides from dumb-pipe business models, is encouraging carriers to take risks and make grabs for market share. Further, the benefits associated from capturing customers - such as lower churn, new service provisioning, and higher cash flows - provide a case for short-term sacrifices."