IPTV 'can reduce cable subscriber churn'

Internet protocol television (IPTV) has the potential to disrupt cable and internet business models in the US, as well as the preferences of the consumers who use them, claims a new study by eMarketer.

According to the online research firm's latest report, Internet Protocol TV: Global Trends—2006, major changes that will promote the predicted disruption in the future are already occurring.

Due to the increasingly widespread adoption of broadband, eMarketer projects that in 2010 there will be 8.7m IPTV households in the US, up from 300,000 in 2005.

But the revenue potential for IPTV as a stand-alone product is limited at best, says Ben Macklin, senior eMarketer analyst.

However, Macklin added that as part of a bundle of services, including broadband and fixed and mobile telephony, "the value of IPTV will be in its ability to reduce churn and to perhaps recoup some revenue lost to cable companies offering voice services".

The new paper from eMarketer follows recent news from RBC Capital Markets, an international investment bank, that three in five television viewers in the US say they would consider IPTV over satellite or cable services.

Earlier this week, a report by market analyst Datamonitor revealed that over the coming years, the States will continue to lead the market in internet protocol television, far outstripping Europe, where the format will remain a niche proposition in most countries.