OTT growth fails to halt global pay-TV subscription rise

Joseph O'Halloran | 20-09-2012

A new survey from ABI Research is forecasting 5% growth in worldwide pay-TV subscribers despite a noticeable shift to over the top (OTT) online TV Services in the US.

ABI calculates that there will be 858.1 million global pay-TV subs at the end of 2012, the decline in North American subs notwithstanding. At the heart of this fall is the continuous weakening of the US cable TV market which in the first two quarters of 2012, lost nearly 800,000 subs despite an increase in broadband subscribers. In the same time, telcos revealed a growing IPTV arena, adding around 600,000 subs. ABI Research expects that the overall pay-TV subscriber base in North America at the end of 2012 will decline 0.2% from 2011.

“As broadband adoption grows, it is likely that pay-TV subscribers are switching to Internet TV services. Internet TV services are cheaper than traditional pay-TV services or even free of charge. Services such as Netflix, Hulu, YouTube, etc. are cheaper alternatives for pay-TV subscribers especially in these uncertain economic times,” said Sam Rosen, practice director of TV & video.

By contrast, ABI believes that the key growth region will be the Asian-Pacific market which is expected to add more than 27 million subscribers in 2012. It notes that on-going digitisation process in countries, such as India, has been steadily increasing digital TV penetration.

Yet ABI cautions that progress could be better, in particular in India where the government announced that it would not extend the deadline set for cable digitisation of 12 million homes in the four major metro areas beyond October 31, 2012. ABI said it was sceptical that target will be reached as only 68% has been achieved so far. “Overall Asia-Pacific digital cable TV subscriber base is expected to reach 213 million by the end of 2012, a 27% increase from 2011,” said Khin Sandi Lynn, research analyst.