Prague firm wins IPTV contract in China

Prague-based IT firm Kit Digital has won a major contract to provide Internet protocol television (IPTV) services to a group of TV stations in China, in a deal analysts say proves the company is a "major player" in the global online video market.

The China United Television (CUTV) project, which groups together 19 TV stations and newspapers throughout China, is using Kit Digital's social-video platform for its video services on computers and mobile devices.

The new platform was unveiled at the China International Cultural Industries Fair in Shenzhen, Guangdong province, May 13.

The three-screen system allows users to browse top content and related videos while they watch live TV or video-on-demand, and is compatible with computers and mobile devices.

Industry analysts have praised Kit Digital's success in this expanding sector and said it was another sign of good future health for the technology industry here.

William Cooper of Internet television consultants Informitv said it was a "remarkable" achievement for a Prague-based firm to have secured an IPTV contract in China.

"China is the world's leading broadband market and is set to become the leading country for the adoption of IPTV services that are similar to cable television but delivered over a managed data network," Cooper told The Prague Post.

He said he believed Kit Digital's ability to deliver its system over existing broadband networks without the need for new infrastructure was a key factor in the company's success.

"This is a mode of distribution that is growing rapidly in importance, as broadband connections become more capable of delivering high-quality video services," he said.

Brian Turner of TechWatch.co.uk told The Prague Post he saw the new CUTV service as another sign of the global trend of traditional broadcasters rushing to get on board with the new technology.

"IPTV is still seen as the future of digital broadcasting, therefore many companies and countries are looking to establish strong IPTV services now to ensure they can supply increasing demand," he said.

Turner noted that the increased availability of the Internet via computers and mobile devices was seeing IPTV "already becoming very much more mainstream around the world, especially as a rival to satellite services."

IPTV is already available in the Czech Republic from a number of broadcasting and telecom companies.

Czech Television, for example, offers live TV and catch-up programming online and on an expanding range of mobile devices including iPhones, iPads and Android devices.

Late last year, Kit Digital beat off competition from Telefónica O2 to provide video streaming on ČT's website in a two-year deal valued at 12 million Kč, according to Reuters.

The main mobile services providers in the Czech Republic - Vodafone, Telefónica ČR and T-Mobile - all provide Internet services for mobile devices with IP video capabilities.

The domestic market for IPTV remains in the early stages of development, but nonetheless generated estimated revenues of 90 million euros in the Central and East European (CEE) region last year, according to a recent market analysis by consultants Frost & Sullivan (F&S).

F&S predicted IPTV revenues would see stable growth to reach 270 million euros by 2017, noting that the Czech Republic was the most developed CEE market for such services.

The analysts said the most important challenge for IPTV operators was to compete with existing pay-TV operators, who have the benefit of established cable and satellite infrastructure as compared with the relatively low penetration of broadband.

However, F&S noted that increased availability and speed of broadband connections together with increased interest from telecom and cable companies would see higher revenue from IPTV.

Analysts predicted IPTV would eventually fulfill the prediction of U.S. Federal Communications Commission media chief Bill Lake, who said in 2009 that the time of TV and Internet as separate media "is coming to an end," because the two technologies were beginning to fuse into a single medium.

"The Internet and television are very different media, but they are coming together, for instance in the form of network-connected televisions," Cooper said.

"In the long term, it is likely that television will be predominantly delivered over data networks, but in the meantime we will see hybrid forms that combine the best features of the Internet with the benefits of broadcast distribution."

Turner agreed, noting that while "so far IPTV has yet to hit a tipping point that means a single integrated Internet media service for the home becomes the norm rather than the exception, it is inevitable that TV and the Internet will become one."

The global market for IPTV is forecast to grow from 28 million users in 2009 to 83 million in 2013, with revenues increasing from $12 billion to $38 billion, according to the International Television Expert Group.

Bill Lehane can be reached at
blehane@praguepost.com