The economics of IPTV

The cable industry's expenditures of approximately $1 Billion per year are based on network updates to accommodate higher data speeds. Most operators use 2-3 channels to support maximum data speeds of 50 Mb/s to 100 Mb/s. However, because video streams require a high bit rate for much longer periods of time, the expenditures to support high amounts of video traffic will be much greater. This phenomenon is called persistency. Data persistency is routinely 5% while video persistency can easily reach 50%. As video traffic continues to grow, this means that significantly more CMTS downstream channels will be required to carry this video content. Based on today's market, it is likely that industry expenditures for CMTS expansion could exceed $2 Billion a year, virtually all of this expenditure being driven by video traffic. Adoption of IPTV for carrying the majority of this traffic could save the industry approximately 75% of this capital expenditure