Global IPTV subscriptions are expected to jump from two million to 34 million between 2005 and 2010, reflecting a compound annual growth rate (CAGR) of 60%. According to The Diffusion Group’s latest report, IPTV Update 2006 – The Future of IP Media, North America will experience the most rapid rate of growth during this time period with a CAGR of 78%, followed by Europe, the Middle East, and Africa (EMEA) with a CAGR of 61% and Asia/Pacific with a CAGR of 41%.

According to the report’s authors, renowned IP media experts Herve Utheza and Colin Dixon, IPTV deployments in several key European countries are on schedule, with new launches expected in smaller Eastern European and Nordic countries. For these reasons, the EMEA region is expected to top 14 million IPTV households by 2010 with France, the UK, Italy, Spain, and German accounting for 87% of the total.

The number of North American IPTV households is also expected to near 14 million by 2010, with the US accounting for 80% of these subscriptions. While the majority of 2005 and 2006 IPTV deployments have been executed by small rural operators, TDG expects the new deployments by Verizon and AT&T to greatly increase subscribers starting in 2007.

Asian IPTV deployments, however, are expected to account for only 5.6 million subscriptions by 2010. "Although Hong Kong’s PCCW continues to push IPTV deployments, and despite ongoing IPTV trials in both China and India, consensus expectations regarding the growth of the Asian IPTV market are simply not achievable," noted Utheza.

Utheza points to the impending launch of Digital Terrestrial Television (DTT) in China as the primary reason for poor IPTV demand in the region. "After many years of political wrangling, the Chinese government is about to announce a single DTV standard for both fixed and mobile services. Once this happens, the government will start pushing more aggressively the distribution of digital set-top boxes as a means of ramping up the number of digital TV subscribers." The Chinese government has stated publicly that this new standard (dubbed 'Digital Multimedia Broadcasting – Terrestrial/Handheld' or 'DMB-T/H') will eventually serve more than half of China's TV viewers, especially those in suburban and rural areas. Until then, analog and broadband based services may well find a healthy market for the few years to come.

"IPTV market conditions vary widely depending on the country or geography in question, entailing that individual markets will evolve and behave in very unique ways," added Dixon . He also noted that a handful of individual service operators will account for 75% of the deployed volume with the remaining 25% split between hundreds of other operators. "These conditions will pose a challenge to all types of IPTV solutions vendors, one that requires detailed and flexible implementation and go-to-market strategies."

PTV Update 2006 – The Future of IP Media builds on TDG's landmark 2005 IPTV analysis and uses a 'bottom-up' forecasting model to predict IPTV deployments in three global regions (Asia/Pac, North America, and EMEA) and more than 28 specific countries. The report also analyzes and forecasts demand among ancillary markets including IPTV set-top boxes, chipsets, video-on-demand systems, head-end encoder and multiplexer equipment, and conditional access systems.

For more information about this report or other TDG research, click here.