IPTV profitability 'fuzzy,' report says

Lack of framework cited in analysts' findings

HONG KONG -- Internet Protocol TV services in Asia Pacific are among the most advanced in the world, but a new report says the outlook for profitability is "fuzzy."

The study by Light Reading Communications Network makes forecasts for 14 territories and analyses the Hong Kong and Korean markets.

"We believe the long-term opportunities that IPTV brings outweigh the short-term risks," said Charles Moon, analyst at Pyramid Research and author of the report. "The promise of media, and the escape it provides from dumb-pipe business models, is encouraging carriers to take risks and make grabs for market share."

However, operators continue to face challenges in the areas of regulatory constraints, content and technology costs. "Typically, regulatory issues come first, then the mammoth challenge of valuing and procuring content along with technology issues -- both of which can affect subscriber take-up and bottom lines," Moon said in the report.

"One of the most glaring problems surrounding IPTV has been the lack of any framework around the service, putting it in a gray area with neither the telecom nor broadcasting regulators having clear oversight of the sector," Moon said.

"To make matters worse, the entrenched position of cable companies in markets like Japan and South Korea make it even more difficult for new IPTV players to negotiate for content rights," the report said.
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