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IPTV Will Be the Game-Changer for Subscription Services

By 2011, More than 9 Million US Households Will Subscribe to Telco-Provided Video Service, Says Yankee Group

Yankee Group today announced that IPTV will redefine pay TV in the United States. IPTV will change the competitive landscape for subscription services by morphing the service from one-size-fits-all traditional broadcast TV into an open, flexible, customizable offering, tailored to the needs of local communities. By 2011, more than 9 million households in the US will subscribe to telco-provided video service.

IPTV’s influence in the communications field and on consumer communications services in the US is driven by the impact of the global connectivity revolution on business and market dynamics. As a result, we are witnessing massive transformations taking place in media and entertainment and communications industries. With the digitization of content and the internet as a platform, both industries are morphing from structured, linear ecosystems to open and fluid sectors influenced by greater consumer control.

“IPTV will forever alter the video ecosystem by creating not only a new breed of service, but also a new breed of service provider,” said Vince Vittore, Yankee Group program manager, Enabling Technologies. “The phone company of the past–the 800-pound gorilla–is dead. IPTV will transform telcos from the market-dominating gorillas they once were, to street fighting guerrillas.”

According to the recently published Yankee Group Report, From Gorillas to Guerrillas, IPTV Changes Everything, IPTV will also forever transform how telcos operate. It will take the service providers from being highly centralized, giant corporations to become decentralized, flexible entities that can respond much more rapidly to the specific needs of the communities they serve. In addition to the share-shifting that will take place among cable, satellite and telcos in the video market, there will be more fundamental changes:

  • IPTV will change the organizational structure of telcos.
  • IPTV will create micro-markets of intense local competition in the US surrounded by wide swaths of territory where cable operators face only satellite competition.
  • IPTV will change the way applications are developed for TV.
  • IPTV will force the cable companies to become more dynamic and responsive.

“IPTV changes the rules of the game for the consumer communications services in the US,” added Anton Denissov, Yankee Group analyst. “To become guerrillas, telcos must shift executive authority to local management. Those that do not have the flexibility will lose out to the competition.”

The Report, coauthored by Vittore and Denissov, also provides comprehensive recommendations for IPTV providers and cable operators.

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The people of Yankee Group are the global connectivity experts™–the leading source of insight and counsel for builders, operators and users of connectivity solutions. For nearly 40 years, Yankee Group has conducted primary research that charts the pace of technology change and its effect on networks, consumers and enterprises. Headquartered in Boston, Yankee Group has a global presence including operations in North America, Europe, the Middle East, Africa, Latin America and Asia-Pacific.

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