IP comes of age - TV’s most essential imperative

Ericsson research explores the transformative effect of IP technology in TV and Media over the next six years. Highlights the opportunities and challenges presented by the explosion in connected IP video devices and associated video traffic in networks. Second part of Ericsson’s six-part series of Game Changers, which underpins company’s vision for TV and Media in 2020. Shows the impact on consumer expectations and behavior by redefining their video experiences, accessibility and adding value to every connected device they own.

Ericsson (NASDAQ: ERIC) has released its second Game Changer paper, ‘The IP Imperative’, the latest installment in a six-part series that details the fundamental factors that are driving change across the TV and Media industry.

The IP Imperative highlights how the invention and adoption of IP (Internet Protocol) technology has defined a new era that has re-shaped our planet, our lives and global industries including TV and Media. Ericsson explores how IP has enabled an explosion in connected devices across the globe, a fuelling of enormous traffic growth in data networks of which video is the main component, a transformation of consumer expectations around video experiences and a fresh approach to collaboration between broadband providers, content owners and new market entrants.

Ericsson’s vision of ‘The IP Imperative’ highlights the following key findings:


Broadband Subscribers and Connected Devices

Global mobile broadband subscriptions reached 2.3 billion in Q1 2014

All new devices are IP enabled

The number of IP connected devices that can view video grew from 200 million (personal computers) to over 1.6 billion between 2000 and 2013

Rapid increase in mobile broadband subs

Conversion of 3G Mobile broadband to LTE fast mobile broadband subscribers and devices

Set-top boxes shrinking in cost and scope

Over 8 billion connected mobile broadband subscribers

90% of the world’s population covered by mobile broadband

Fixed broadband penetration reaches 1 billion home subscriptions

50 billion connected devices, of which 15 billion are video enabled

Home DVR shifted to cloud and network

Mobile Traffic

Mobile data traffic in Q1 2014 exceeded total mobile data traffic in 2011

65% growth in data traffic between Q1 2013 and Q1 2014

Rapid growth in data traffic in fixed and mobile networks

Mobile broadband traffic highest growth

Video is the primary driver of all traffic growth

Data traffic will increase by about 10 times

Mobile broadband traffic will have reached almost 20 exabytes monthly

Video represents 50% of all mobile broadband traffic

Use of IP in Delivery

Well established as a managed IPTV proposition with over 90 million global IPTV subscribers

Well established in advanced markets – internet OTT delivery content

Use of global CDNs by content owners to accelerate OTT traffic

Hybrid terrestrial platforms defined and being adopted (YouView, HbbTV)

Satellite and IP proprietary platforms will be deployed more widely

LTE unicast video enhanced with LTE Broadcast deployments

Most local telcos, cable operators and ISPs deploy operator CDN’s for acceleration and monetization of video traffic

IP is the dominant video delivery network technology

Global IPTV subscribers reach 200 million

Emerging markets rely on mobile broadband for IP transformation

OTT delivery model applicable to all industry players

All pay TV service providers have a core IP strategy for delivery to the consumer

Quality of Experience

Consumers already used to good streaming experiences in-home

OTT disruptors and content owners establishing models for paying for/investing in assured end consumer quality of experience

Rapid video growth already straining networks

Quality of experience/ bandwidth crunch looming unless networks invest in capacity and efficiency measures, and explore revenue generation opportunities

Net neutrality and traffic optimization discussions ongoing in all countries

Video consumption via mobile networks is as good as fixed networks in many countries

Sufficient bandwidth and established revenue share to support viable OTT delivery model

Time spent watching on-demand and time-shifted content will reach 50:50 parity with linear and live TV

Source – Ericsson’s The IP Imperative Game Changer paper

"The impact of the internet on our daily lives is arguably the single biggest technological innovation of the last century and its effect on entertainment has been equally dramatic," said Per Borgklint, Senior Vice President and Head of Business Unit Support Solutions, Ericsson. "The adoption of IP has meant that the previously linear nature of broadcast television has shifted to a new interactive and on-demand paradigm that has delivered a path beyond the living room to connected devices all around the world.

"This change has huge consequences for industry players. Content owners, broadcasters and advertisers must adapt their business models to take advantage of more direct engagement with viewers; TV service providers must truly redefine consumer discovery and consumption experiences and embrace IP delivery; network owners must transform networks to cope with, and benefit from, the strain of increasing video traffic. The inflection point has been reached where broadband IP capacity has met with ever more IP-centric connected devices and the path to 2020 is clear – more speed, more demand and more immediacy."

Ericsson’s IP Imperative details how content owners, broadcasters, TV service providers, network owners and advertisers can flourish in 2020 as IP forces transformation of delivery networks, spectrum allocation and business models across the industry.

Notes to editors

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