New landmark for global DTH industry

November 13, 2013 09.43 Europe/London By Chris Dziadul

Total revenues of the 150 platforms with TV revenues derived primarily from DTH broadcasting are likely to exceed $100 billion this year.

However, according to a new executive report from Euroconsult entitled DTH Platforms: Key Economics sand Prospects, there are three market profiles with different growth patterns that can be identified in the 100 countries, with a total of over 202 million DTH subscribers.

The first, seen in advanced markets such as the US, UK, France and Japan, has high pay-TV maturity and fierce competition resulting from telecom and media convergence and online entertainment.

The second, in transitional markets, sees pay-TV penetration reach over 50% and consolidation take place among pay-TV providers in order to reach critical size and solid operating margins.

The third, in emerging and fast-growing DTH markets, had 126 million subscribers and 20% growth last year.

Strong competition exists among platforms, with up to six or seven services in countries like India and Indonesia.

The standard offering, expect for new platforms, stands at 100-150 channels, with around 25% of the total offering more than 150 channels.

Programming usually accounts for over 40% of operating costs and 30-40% of revenues.

Over two-thirds of platforms now offer HD services and the number of platforms offering 20 or more channels in the format has more than doubled in the last year.

Significantly, SKY Perfect JSAT in Japan should become the first HD-only platform in 2015. ARPUs range from $10 or less to $40-50 in more advanced markets.

Vertical integration and converging service ecosystems is a major trend for DTH platforms and includes three pillars.

The rollout of new generation DVRs with up to 1 TB storage capability and more flexibility in home networking is a first component.

The second is the rollout of non-linear services with VoD (online and push-VoD) by already more than two thirds of DTH platforms, TV everywhere/on the go and OTT services.

The need to offer triple play services leads to different strategies, ranging from the ownership of DTH services by telecom operators (more than 60% of platforms in Latin America), to direct investments in telecom operations (Sky Digital in the UK or Bulsatcom in Bulgaria) and partnership oriented strategies (DirecTV in the US and Canal+ in France).

Churn rates are between 10% and 20%, with the best performing platforms being Astro in Malaysia, Cyfrowy Polsat in Poland and Sky Deutschland in Germany.

DTH subscriptions should reach close to 350 million in 2022 worldwide including around 270 million in fast growing economies. Asia, led by India and Indonesia, and Latin America, led by Brazil and Mexico, are expected to be the fastest-growing markets.