Research and Markets has announced the addition of Internet VAS--Focus Report on IPTV 2005 to their offering.

This report is based on our solid understanding of the Chinese telecommunication and media markets, with a focus on telecom and VAS. We combined in-depth interviews with professionals in relevant industries with our broad collection of second-hand materials.

With the rapid growth of the broadband market, user demand for video services experienced rapid growth. Based on their core competencies, telecom operators, media players and various kinds of institutions with solid industry background have entered the IPTV market and begun small-scale promotion. However, strict regulations on content resources in the media industry and rampant piracy of domestic content make it difficult to predict the nature of the IPTV market. The questions explored in this report are:

How to create innovative business models that meet customer demands?

How to create demand for unique IPTV applications? Those problems pose significant challenges for the whole IPTV industry chain.

Based on our insight into the media industry chain and its holistic understanding of the market situation, we conducted a deep analysis of the media and IPTV industry chain. Using this analysis, we developed prospective forecasts and provide suggestions for IPTV industry development and accompanying commercial opportunities.

In this report, we look into the current situation and development trends of IPTV and answer the following questions:

• Industry environment: What are the drivers and inhibitors of IPTV?
• Competing technologies: Which is better, IPTV or traditional TV?
• Business model: How to make money?
• Market size: What size can the market reach?

Our Findings

• Industry environment
• IPTV market still is in infancy, with poor user's awareness. While establishing an IPTV industry chain, many efforts must be made to introduce concepts, set up standards and cultivate market demands. This phase will last until 2006.
• In the short term, key problems are policy uncertainties and imperfect hardware platforms, whereas in the long term, the main inhibitors are an immature industry chain and unclear business models.
• Marketing promotion for IPTV industry is still immature. The main activities are the promotions of telecom operators, equipment vendors and content providers in the main segments of the industry
• Due to slow progress of Digital TV in China, IPTV industry can develop with fairly wide window of opportunity. In the next 3-5 years, we predict that IPTV will face intense competition from traditional analog TV. With the progress of Digital TV and the demise of analog TV, IPTV will have to confront challenges brought by Digital-TV, but those two industries will compliment each other rather than compete for the same market
• The increase of distribution platforms creates more opportunities to content generation segment. On the one hand, multi-platform distribution will definitely lead to a shortage of content resources and add bargaining power to content owners; On the other hand, there are more chances for repeated use of content recourses, second-time development and diversified VAS
• Channel operators, as integrated platforms, bring new opportunity for the market, especially for those firms with adequate capital but lack of content advantage
• Due to their own constraints on systems, capital and operations, media operators will fail to expand into the IPTV market effectively. Their position will gradually weaken and they will lose their functions in a fast-growing IPTV market.
  
  Compared with media operators, telecom operators have comparative advantages in a top-to-down unified deployment throughout the country, sufficient capital and modern management systems, which consolidate their decision-making role in IPTV industry chain.
• In IPTV market, established content providers will share the service provider's revenues by granting distribution rights after the contents approved by relative authorities, which will be weakened gradually with the gradual opening of the media market.

Business model

• IPTV has the potential to change the user experience significantly. The evolution from "passive reception" to "Video on Demand" until "Real-time Interactive experiences" represents a paradigm shift. However, considering ingrained consumption habits, willingness to pay and economical elements, we predict that traditional television programs will continue to take a dominant market position, while VoD and interactive television programs will gradually increase their market shares.
• IPTV can help realize the convergence between traditional media and Internet VASs. Content from single television programs could be commercialized in online gaming, online music, e-commerce etc.
• The key to innovative IPTV business models lies in taking advantage of its interactive characteristics. Utilizing features like time shifting and terminal diversity could satisfy users personalized demand for differentiated content.
• User base and market size
• Domestic IPTV users will reach 1.17 million in 2005. Rapid growth, however, will only take place in and after 2007. In 2009, the market growth will slow down, reaching 16.65 million users
• The expansion of IPTV market size will yield a revenues increase, from 0.3 billion RMB in 2005 to 16.7 billion RMB in 2009. The content providing business will be the main revenue.

Enterprise advertisement spending on IPTV will increase to 6.7 billion in 2009.

For more information visit http://www.researchandmarkets.com/reports/c24671.