Facing market saturation of traditional telecom services, telecom operators must overcome the danger of remaining as a dumb pipeline. In the meantime, the video contents industry is becoming increasingly competitive and complex with the introduction of new services and platforms, such as internet video sharing sites (YouTube), online VOD services (Netflix), and IPTV. Thus, in order for telecommunication companies to evolve beyond the old subscription-based business model and pursue sustainable growth under the new paradigm, IPTV can be a viable strategy.
Meanwhile, the level of development of IPTV is different across countries. For instance, Hong Kong has the most developed IPTV industry in the Asia Pacific area, with telecom operator PCCW’s Now TV dominating the IPTV market. The success of Now TV, which is often regarded as the most exemplary case of IPTV, was based on the offering of exclusive contents and the utilization of Quadruple Play Service. On the other hand, the Japanese IPTV market has been struggling due to the difficulty of securing exclusive contents. Furthermore, Japanese cable TV does not suffer from retransmission issues and provides VOD just like IPTV, making it more attractive than IPTV.
This paper attempts to identify the key factors that lead to the successful implementation of IPTV across countries. While some studies on IPTV have investigated several aspects of IPTV, such as consumer motivations for using IPTV (Kim and Lee, 2013) and the factors affecting ITPV diffusion (Lee et al, 2015), there has been little research on what influences the success of IPTV in various markets around the world.
In order to compare the IPTV penetration of various countries, two data sets will be analyzed. One is released from the International Telecommunication Union, and the other is from Pricewaterhouse Coopers. The data sets include country specific information regarding telecommunication infrastructure such as level of service, number of subscribed users. We will collect data of 54 countries during the period between 2009 and 2013.
The analysis will be conducted in two steps. First, an explanatory factor analysis will be performed to identify uncorrelated factors by uncovering the underlying relationships among variables. Factors might include, for instance, infrastructure (yearly investment in broadband infrastructure), quality of substitute services (cable subscription), regulation (intensity of IPTV related regulation), market competition (competition intensity among IPTV providers). Then, regression analysis will be conducted using obtained factors as independent variables and IPTV penetration percentage as the dependent variable. These steps will allow for the identification of factors determining the success or failure of IPTV in each country.
Through regression analysis, it would be able to determine which factors affect successful IPTV penetration in diverse countries. Results would suggest many critical implications to the telecommunication industry, specifically to the future of telecom operators. First, the identification of common success factors would provide insights into understanding the business context of each country, since each country has different levels of IPTV penetration and different settings. Second, interpretation of results would provide many strategic implications to telecom operators, by verifying what aspects must be reinforced for the successful utilization of IPTV.