The growth of IPTV is adversely affecting the market for domestic pay-per-view television, according to research from Analysys Mason.

The number of households subscribing to pay-TV services will increase at a compound annual growth rate of 3.2 per cent from 90.6 million in 2007 to 109.2 million by the end of 2013.

However, IPTV viewing is expected to grow by as much as 15 per cent between 2007 and 2013.

"The adoption of IPTV services will be driven by a combination of factors," said report author Richard Hadley.

"These include the proliferation of multi-play strategies, latent broadband growth, improved brand recognition, broader content offerings, and a general move towards digital TV services as the analogue signal is switched off in Western Europe.

"However, the growing popularity of IPTV among households will contribute to a slow down in pay-TV spend as these predominantly lower-value TV packages are increasingly bundled with telecoms services."

The report is bad news for broadcasters, since IPTV services are generally lower value than digital pay-per-view.