Hangover Joe's Holding Corp. (fka HJOE)

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analysts expect the IPTV market in South Korea to exceed USD 7 billion by 2020, growing at a CAGR of over 11%, according to their latest report.

Internet Protocol television (IPTV) is considered the next generation of communication and entertainment. It can receive and display video streams encoded as IP packets and enables viewing TV shows on-demand with interactivity between additional services and viewers.

According to Soumya Mutsuddi, a lead research analyst at Technavio for consumer electronics, “An increasing number of vendors are enhancing interactivity features such as streaming advertisements for shopping during regular programming. This is likely to increase the average subscription of IPTV during the forecast period.”

In addition, the growing popularity of interactive services such as smart browsing and telephony is attracting consumers toward IPTV technology. The number of subscribers is likely to grow steadily owing to the advances in technology that facilitate multiscreen viewing. Increasing penetration of IPTV among fiber Internet subscribers in South Korea is expected to drive the growth of the market during the forecast period.

Technavio’s lead media & entertainment market research analysts have identified the following four factors that will drive the IPTV market in South Korea:

Increased demand for VoD
Growth in interactive services
Increase in relevant advertising for IPTV
High IPTV penetration in fixed broadband services
Increased demand for VoD
The popularity of on-demand content is growing rapidly, especially for some of the major TV genres such as live sports, reality shows, sitcoms, drama, and programs for children. This is leading to intense competition among major vendors that include content providers, software solution companies, device manufacturers, network operators, and advertising companies. Companies and broadcasters are in the process of revamping their offerings to cater to the shift from linear broadcast to on-demand services.

Broadcasters and other major players have to serve the social and VoD needs of customers. They also have to devise strategies to monetize their services. Multiple cable and satellite TV operators offer an extensive collection of free VoD content to encourage subscribers to pay for other on-demand titles. However, the success of this business model is yet to emerge as subscribers have become accustomed to receiving free titles on demand.

Growth in interactive services

An IP-based platform provides more interactive, personalized TV viewing experience. It offers an interactive program guide that enables subscribers to search for content by the title or an actor’s name. Picture-in-picture functionality allows viewers to surf for content without closing the program that is currently being viewed. This platform also enables viewers to search a player’s statistics while watching a game and even see the content through a different perspective by controlling the camera angle.

“Moreover, the interactive TV platform engages users and makes them part of the program by providing opportunities to vote through TV programs,” says Soumya.

Increase in relevant advertising for IPTV

The Internet enables personalized advertising that is generated by the search terms and websites accessed by a user. This is one of the key advantages of advertising on the Internet. However, TV advertisements are reported to be more effective as viewers have no control over the content.

IPTV combines the strategies of both TV and Internet advertisements to significantly capture the viewer base on a large scale. The viewer base for IPTV will increase with the number of channels and consequently increase the return on investment for vendors.

IPTV enables broadcasters to fragment the viewer base to increase the effectiveness of advertisements. Broadcasters air advertisements to target specific audiences, considering their possible choices of activities.

High IPTV penetration in fixed broadband services

South Korea is one of the leading users of fixed broadband services. IPTV subscriptions are the main source of revenue for broadband operators. The increase in revenue for broadband operators during the forecast period will depend on the provision of additional services such as IPTV, over broadband connections. The IPTV service accounted for 15% of total broadband services in 2013, which is expected to exceed 30% by 2020.


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