Pay-TV is set for continuing fast growth, according to a new report by Pyramid Research. IPTV will be overshadowed by other methods of bringing TV services to the region, primarily because of regulatory hurdles and the telcos' need to look to other methods of bringing IPTV to Latin America in the light of ever-increasing and immediate customer demand.
IPTV will take a backseat to other pay-TV platforms as telcos seek alternative strategies to meet the significant market demand, according to a new report from Pyramid Research. IPTV in Latin America: Not So Fast examines the market for pay-TV services in general and IPTV in Latin America in particular.
The 18-page report analyses the regulatory hurdles faced by IPTV and the progress telcos are making in introducing various pay-TV services, as well as the various strategies they employ to make the most of the opportunity in the face of significant challenges. The report also cites more than 23 examples of pay-TV services and contains case studies of Telefónica and Telmex/América Móvil that investigate their respective pay-TV strategies across the region.
In recent years, telcos around the world have developed an attraction to the idea of IPTV as a new revenue source and competitive instrument. However, IPTV is simply not living up to expectations in Latin America.
"Fewer than 0.1% of households in Latin America subscribed to IPTV at year-end 2008 and the technology had very few net additions during the year," notes Derek Medlin, Analyst at Pyramid Research and author of the report. "As the market has evolved, it has become evident that there is significant demand for pay-TV, which is pushing telcos to seek alternative strategies to meet this demand," he says. "However, the reality is that the struggles on the front end have severely crippled adoption so far; regulatory issues are blockading IPTV altogether, or at least leading to deployment delays."
Although pay-TV penetration remains anaemic relative to the adoption of pay-TV in other regions, Pyramid believes this is due to a lack of supply rather than a lack of demand. "Recent initiatives from telcos and cable companies are catalysing the market by thrusting a variety of pay-TV services into under-penetrated areas and market segments," says Derek Medlin. "As a result, adoption is taking off, making the low penetration levels an indicator of the growth potential, especially when gauged against the levels of adoption reached in other regions," he explains.
The conclusions of the report include the fact that IPTV will have to take a backseat to other pay-TV platforms for the rest of the forecast period, becoming part of a lineup of pay-TV offerings rather than the sole telco service. In the future, in addition, Pyramid does not expect IPTV to break out of its niche until around 2012, when it will be approaching a 5% share of total pay-TV subscriptions.
IPTV in Latin America: Not So Fast is priced at US$595 and can be purchased by contacting Jeff Claudino at firstname.lastname@example.org or +1-619-229-9940.
* Pyramid Research offers solutions to the complex demands of the telecoms, media and technology industries. Its analysis is positioned at the intersection of emerging markets, emerging technologies and emerging business models, powered by market forecasts for over 100 countries.