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IPTV’s ARPU Challenge

by David Mercer | 3月 12, 2008

At the IPTV World Forum today, I chaired a panel during a session on IPTV ARPUs. The preceding presentations had demonstrated how difficult it is to stay focused on the topic of user revenues without drifting into the complexities of network architecture or exciting new service concepts (that users may or may not actually want to pay for). So I asked the panel contributors to focus on the revenue issue and I thought they did a good job. Joao Pedro Mendes represented Portugal’s Sonaecom, which has operated an IPTV service for the past year. In spite of my hopeful prompting he was unwilling to divulge precise details on the company’s ARPUs, but he did indicate strongly that on-demand content was one of the main tools Sonaecom has to get users to increase their spending, and the company considers its VOD service to be successful. Joao’s main point, however, was that introducing new services is as much as a way of differentiating the IPTV provider from competitors in the market, serving as a customer acquisition driver, as much as increasing revenues directly. Gudjon Mar Gudjonsson, CEO of the Icelandic solutions provider Industria, believes that one of main opportunities for IPTV providers to increase ARPUs is to offer users a much higher degree of flexibility in their ability to choose only the channels and programming that they want to pay for. This point was supported by a questionner from the audience, although he also admitted that he would also like to pay less to watch those channels. This is an long-standing debate in the pay TV industry: the battle between users wanting to pay for only the content they want to watch and the content providers who, it is claimed, have to subsidise the vast amount of content that would never get produced if it had to be profitable in its own right. Both ANT Software’s founder, Simon Woodward, and Jonathan Wilson of Red Bee Media recommended that IPTV providers should focus on changing the relatinoship with subscribers and viewers. For example, the provider needs to become a trusted partner in guiding each user towards content he or she will like. It is IPTV’s inherent interactive capabilities that should allow providers to improve the service and increase its value. Whether customers are willing to pay more for these capabilities still remains doubtful, however. My own conclusion of the panel was that IPTV service providers should be very cautious before assuming that ARPUs will increase with every additional new product or service. Client Reading: US IPTV Forecast and Outlook: $13.7 Billion by 2012 Add to Technorati Favorites
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