MRG's new bi-annual IPTV Forecast finds that Europe still leads the world market, while Asia and the "Rest-of-World" see emerging markets like China, Eastern Europe, Korea and Russia taking larger steps to growth. North America sees steady growth by independents, and accelerated growth by the large Telcos.

Growth for IPTV Subs projected from 13.5 million in 2007 to 72.6 million in 2011, roughly a 40% compounded annual growth rate. With an emphasis on profitability, improved operations and sustained growth, large European carriers are planning for future converged services still over 18 months away.

According to Len Feldman, Director of IPTV Analysis for MRG, "We've substantially increased our global subscriber forecast for 2011, from 63.6 million in the April 2007 Forecast to 72.6 million now, in large part because we're considerably more optimistic about the probability for market success in China, India and Korea. We slightly decreased our subscriber forecast for 2007, from 14.3 million to 13.5 million, but paradoxically, our forecast for total system revenues went up, from $2.1 billion to $2.5 billion."

"Europe will remain the number one IPTV market in terms of subscriber count through 2011, but Asia is catching up quickly and will most likely surpass Europe in 2012-2013," said Feldman. "In North America, Verizon and AT&T are growing considerably faster than we previously forecasted, and we expect Verizon to be the world's largest IPTV service provider in 2011."

Technologically, MPEG-4/AVC is consistently replacing MPEG-2 in new installation, as MPEG-2 ceases to be sold even in cost-sensitive markets like China or Eastern Europe. Although DSL continues as the dominant last-mile technology, FTTH (Fiber-to-the-Home) is beginning to show more traction in both new and established neighborhoods.

Some increase in systems revenue also occurred in the Content-Protection/ DRM sector, where our revised market model. Since Content-Protection can include multiple components ranging from Conditional Access to more newly developed Watermarking and Fingerprinting, this sector should continue showing upside potential as security applies to multiple home devices and formats.