In Europe, IPTV a package deal

40% receiving service for free

BRUSSELS -- Forty percent of Europe's IPTV subscribers receive the service for free thanks to special packages that bundle it with broadband, new research revealed Monday.

Europe's telecom giants are offering the service at no extra charge to customers when they agree to a broadband subscription, the Screen Digest study said.

The research says that the sheer size of the investment needed to deliver IPTV usually outweighs the cost savings resulting from even a substantial drop in broadband churn, particularly as IPTV currently generates so little revenue.

"The primary intent behind most of the major IPTV services is to add new broadband subscribers, not to drive profits or even to act as a churn reducer," Screen Digest analyst Richard Broughton said.

The study said that IPTV providers striking deals with satellite TV companies to carry their content proves that IPTV operators are "not overly concerned about making a profit from IPTV" but rather focusing on broadband.

The research also forecasts that competition over the next five years will boost consumer options and the potential for cut-price TV offers, adding that nearly one fifth of French homes will be using IPTV as their main method of TV viewing by 2012.