Cashing in on IPTV

The market growth for IPTV is crucially dependent on the economic viability of its business models according to a study by Berlin-based consulting company Goldmedia. It says the construction and operation of an independent IPTV platform is economically viable only for telecom companies with at least 2.5 million broadband customers.

Revenues from TV services alone do not make IPTV an attractive business model for telecommunications providers. Even for the large network operators, IPTV makes economic sense only after the effects of subscriber churn and growth of customer base are taken into account.

A high degree of quality is decisive for IPTV's success. Technical start-up difficulties and problems with the service can quickly diminish quality and lead to increased customer loss. Without customer growth and acquisition of new customers, IPTV will remain a subsidised undertaking, even among the large telecommunications companies.

IPTV can also be profitable for smaller companies if they market pre-existing offerings. This so-called "reselling model" is feasible for companies with only 250,000 broadband customers. To present, however, such offerings have spread only minimally in the GSA region (Germany, Switzerland, and Austria). Relevant examples can be found only in Switzerland. They are possible here because of compatible terms of copyright.

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