Offering more evidence of the relative decline in the cable TV arena, a new study from Digital TV Research is predicting that the market will be surpassed by a soaring satellite industry.

Specifically, the research calculates that at current growth levels pay-TV revenues will have increased by 12% year on year by the end of 2016, resulting in a total of $173 billion in 2016. As an indication of the enduring strength of the pay-TV market even in the face of the biggest economic contraction for a number of generations, the analyst points out that in 2006 the total was only , up by US$49 billion on 2006 but only up by US$18 billion (12%) on 2010.

Out the key pay-TV sub-sectors, video on-demand (VOD) revenues are set to increase much faster than subscription revenues, yet in absolute terms of them will amount to only $5.7 billion 3.3% of the total by 2016. Moreover, Digital TV Research believes that in the round subscription revenues will dip as more homes convert to cost-effective bundles.

Yet perhaps one of the most intriguing facts of the pay-TV market is how the key platform revenues are changing, particularly the tipping point that will be reached, later in 2011 where satellite revenues exceed those of the once dominant cable TV industry for the first time. By 2016, Digital TV Research expected that DTH revenues will reach $86 billion in 2016, up from $71 billion in 2010. DTH will command nearly half the total revenues by 2016, up from 43% in 2006. By 2016, the US will remain DTH market leader, even though its share of the total will fall from 54% in 2006 to 41% in 2016.

Between now and 2016, cable TV will begin a continued slide with revenues falling by $7 billion between 2010 and 2016 to US$69 billion. However, cable operators will gain extra revenues by converting subscribers to bundles and there will be good news in the form of digital cable revenues replacing those of analogue. Digital cable TV revenues are expected to increase from $43 billion in 2010 to 62 billion in 2016. China will add US$4.3 billion in digital cable TV revenues over the same period, followed by Japan with an extra US$2.6 billion.