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IPTV is on the rise

Market research firm ABI Research is forecasting a 32 percent increase in IPTV subscribers in the next five years.

Phone companies around the world offering IPTV are expected to see a 32 percent increase in subscribers by 2014, according to a new report published by market research firm ABI Research.

ABI's report notes that while traditional satellite and cable TV platforms will likely continue to retain a foothold in most markets, new IPTV services that provide interactive television will grow to nearly 79 million subscribers over the next five years.

"(IPTV) usage will initially be concentrated in countries with established high-speed Internet technologies, such as France, the Netherlands, South Korea, and Hong Kong," Serene Fong, an industry analyst at ABI Research, said in a statement. "But as technology progresses and matures, developing countries such as China will rapidly catch up in subscription numbers."

Earlier this week, Microsoft announced that its Mediaroom IPTV software is being used by a Chinese TV provider called Guangzhou Digital Media Group. The deal marks two firsts for the company--its first IPTV deal in China as well as the first time its software has been used to power TV over a traditional cable network.

Phone companies around the world are using IP technology to provide TV services that compete with satellite and cable operators. Here in the U.S., AT&T is the largest phone company to use the technology to offer TV services. Verizon Communications uses a combination of IPTV technology and traditional cable and broadcast technology to deliver its Fios TV service.

The value of offering TV service over an Internet-enabled data pipe is that it can provide more interactive programming. Viewers can select movies on demand and will one day be able to interact with advertisers to find out more information about a particular product or even buy items right from their TVs.

Today most cable and satellite operators around the world use traditional infrastructure to deliver services. But even these companies are exploring ways to use IP technology to make their services more interactive.