Worldwide pay-TV grows, but thousands of US subscribers cut cords
James R | On 18, Feb 2015
The worldwide pay-TV market is expected to grow 5 per cent in 2014, surpassing 924.4 million subscribers, according to a new report from ABI Research. But the positive global trend masks a decline in some regions, as viewers cut cords and opt for over-the-top VOD services, such as Netflix, instead.
“IPTV is expected to grow a market leading 14 per cent in 2014, followed by satellite TV platform at 7 per cent. The growth rates of cable and terrestrial TV platforms are expected to slow to around 3 per cent,” comments Jake Saunders, VP and Practice Director of Core Forecasting at ABI Research.
Global cable TV market growth is driven by the Asian-Pacific and Latin American markets, which are expected to add over 13 million subscribers in 2014. The cable TV market in North America, on the other hand, is expected to decline approximately 1 per cent in 2014. In 3Q 2014, major cable TV operators in North America lost over 400,000 TV customers.
Video streaming services such as Netflix and TiVo, which cost less than $10 in monthly fees, are the cause for the decline, luring customers away from traditional services.
Now, pay-TV operators are trying to fight back. Sky is putting increasing weight behind the marketing push for its own UK cord-cutting service, NOW, while in the US, HBO is about to launch a similar offering, HBO Go. Others are integrating VODZ platforms into their existing services. Netflix, for example, has already agreed deals with BT and TalkTalk to be included on the YouView set top box, as well as Virgin Media.
Canadian companies, such as Cogeco, Rogers Communications, and Shaw Communications, have also recently announced deals to offer Netflix to their own broadband customers.
Bundled packages are helping pay-TV operators to reduce churn, says ABI, with companies now offering premium content, HD channels and advanced PVR services to subscribers.
HD is particularly successful, suggests the report. Indeed, the worldwide HD subscriber base is growing on all pay-TV platforms, with approximately 57 per cent of total pay-TV subscribers expected to be HD subscribers by 2019.
The research follows a report from uSwitch that revealed British viewers spend almost £400 a year on pay-TV, but that 30 per cent say it isn’t good value for money. Indeed, on average, Brits only watch 25 per cent of the channels available, while 27 per cent of viewers watch just 10 per cent of all possible channels.