Almost one-third of Australians will have switched to an IPTV subscription service by 2016, according to PricewaterhouseCoopers' latest entertainment and media outlook report.

IPTV subscription services differ from services such as YouTube because they are funded by consumer subscriptions and managed for quality of service (QoS) delivery.

“While we expect IPTV to provide an attractive alternative to the more expensive cable or satellite delivered subscription TV service, its success will depend on what content IPTV offers," PwC technology, information, communications and entertainment leader, David Wiadrowski, said in a statement.

"Niche content such as foreign language channels should work well in the IPTV environment. Consumers’ familiarity with internet-connected devices that play video through their TVs will grow and as it does, consumers will come to expect the increased programming choice that IPTV can deliver. As with all media however, a curated experience will still be important."

Previous research by PwC found that just over half of Australian homes already own IPTV-capable devices (such as a connectable television, connectable games console or a set-top-box). PwC expects 27 percent of Australians will have switched to an IPTV subscription service by 2016.

The survey also predicted that the Australian entertainment and media industry will grow by 18 per cent over the next five years. However, advertising revenue is expected to grow by just 13 percent compared to consumer revenue growth of 21 per cent. Strong demand for subscription tv, interactive games and internet access will drive the consumer sector.

“Demand for media by consumers has never been stronger. Viewership, readership and data consumption are all up. The sectors we predict to win in revenue terms over the next five years are those with clear value propositions and attractive take-up via mobile devices.

“It is encouraging to see media businesses focusing on consumer revenues, not just advertising. Consumer spending on entertainment and media products and services will reach $24 billion by 2016 in Australia.“

PwC predicts the entertainment and media industry's local revenue will post a compounded annual growth rate (CAGR) of 4.1 per cent over the next five years, rising to $38.3 billion by 2016.

“PwC expects the revenue declines in structurally-challenged segments, such as newspaper and magazine publishing, to be partly offset by new digital subscriptions. However these new business models require time and patience to be bedded down properly. It would be a mistake to look for instant or short-term success when experimentation is crucial at times of change.”

Top reasons consumers indicated they would switch to IPTV

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