FastWeb Says “arrivederci” to IPTV; Is Telecom Italia Next?

According to reports in the Italia media, Fastweb is said to be shuttering its IPTV service by November due to declining subscribership – a trend that is affecting a number of pay-TV providers within Italy.

Fastweb was a pioneer with its triple-play network, lauching IPTV service back in 2003, over both its DSL and FTTH network.  Subscribers to the service reached a high of 350,000 in mid-2007, but had declined to 240,000  by the end of September 2011.

Fastweb enjoyed early success with its video services, primarily based on its exclusive deals to broadcast all Italia football matches.  However, it learned a valuable lesson with this deal – as customer quickly dropped the service once the season ended.

Over the years, Fastweb introduced a number of features to its service to continue to lure back customers – such as 3-day catch-up TV, as well as an extensive library of VOD and children’s programming. 

The company signed an agreement with Sky Italia at the beginning of 2011 year to bundle Sky’s satellite television offering with Fastweb’s broadband package.

Telecom Italia is facing similar challenges to its IPTV service which was launched in 2005. Although the service experienced significantly growth during 2008, it reached its subscriber peak in 3Q09 with 406,000 subscribers before setting on a steady decline, with subscribers at 242,000 in 1Q12. 

According to Telecom Italia, Sky Italia and even Fastweb – the blame lies solely on the stressed economic environment in Italy and while that certainly is a key factor it is not the only one.

Italy is a unique country as it relates to television.  There are no cable operators and there is very little competition for services plus there is strong DTT services (digital terrestrial television).  Mediaset is the largest provider of pay-DTT services in Italy with nearly 3 million subscribers.  Sky Italia is the largest pay-TV operator with around 5 million DTH subscribers at the end of 1Q12.

Mediaset has seen strong growth for its premium DTT services due to its exclusive rights to Champions League and Europa League sporting events – which are clearly favored by Italian viewers.

Finally, Mediaset is one of the few to offer “multi-screen” viewing, with the recent launch of its Premium Play for iPad app – which had 102,000 downloads within its first 7 days.

So a few statistics on why IPTV seems to have a hard time in Italy.

  • DTT is watched by 64% of the population making it the most widely used platform. DTH/satellite is used by 17% and analogue by 18.7%. (A study by Studio Frasi based on Nielsen TAM data)
  • DTT penetration had risen to 84.7% by the end of July 2011 according to market research published by E-Res.

So there you have it.  Ciao!

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