Two-tier Western European pay-TV market as IPTV gains traction

Joseph O'Halloran ©RapidTVNews | 13-03-2012

New research from Informa Telecoms & Media has revealed a split European pay-TV market with key territories reaching saturation point and others defined by digital refuseniks giving an unexpected boost to IPTV uptake.
Looking at the former category, the analyst says that for long-established premium pay-TV operators there is no panic over reducing, or even declining, TV subscriber numbers, mitigated as they are by what appears to be a successful strategy is to upsell more services to existing clients. Key examples of this are offering basic subscribers enhancements to their TV experience with HD, 3D, multi-room, DVRs etc or the addition of upgraded bundles of broadband and telephony services. Companies cited as active in this regard are cablecos Virgin Media in the UK and Ono in Spain who both have technology partnerships with TiVo and Liberty who will soon roll out its long-awaited Horizon box. via bundling.
In the cable sector, Informa notes that some operators are essentially ‘giving up’ on very low-ARPU analogue subscribers that use the TV service as a utility rather than a premium entertainment service, regarding it as more business savvy to focus on those customers who are upgrading with a greater upsell potential. However the research found that in some territories, digital cable refuseniks are actually spurring the IPTV market by adopting telephony line-based video as a low-cost alternative to a fuller, note more expensive digital cable offering. Informa observed that a growing number of such customers would in time simply cancel the cable service.
In general, Informa expects the IPTV industry to make widespread gains in the region in 2012 especially in France where it is predicted the platform will overtake the DTH market sometime in 2013. If this comes to pass it would make France the first Western European country to have IPTV as its leading pay-TV platform. Other likely notable IPTV hotspots will be Germany, Austria, the Netherlands, Portugal, Denmark and Sweden.
Informa also warned that with free and low-cost options forcing premium pay-TV services to justify their subscription prices, the economic downturn presents a further challenge for pay-TV as it competes against an increasing number of alternatives for customers' leisure time and disposable income. Even though it rejects the notion that cord cutting is taking place to any great level or to any similar effect, the analyst does caution that as as OTT improves its offering pay-TV operators should adapt to changing consumer tastes with new initiatives such as multi-screen strategies