PwC: Subscription TV undaunted by OTT

June 4, 2014 09.44 Europe/London By Julian Clover

Girl with tablet (PwC)Subscription TV revenues will continue to grow in the face of growing competition from OTT services, says PwCs Global Entertainment and Media Outlook 2014-2018.

The blue chip analysts also predict that internet TV advertising will double in the next five years.

Global subscription TV revenues (excluding licence fees) will grow at a CAGR (compound annual growth rate) of 3.5% over the next five years to $236bn in 2018.

PwC says the growth demonstrates that subscription TV is in a healthy position, assisted by the initiatives it has implemented to counter the impact of OTT and other disruptive influences.

Its the traditional broadcasters that will gain the most from the rise in internet TV advertising, increasing revenues from $3.7bn in 2013 to $9.7bn in 2018, and more than double its share of total TV advertising from 2.2% in 2013 to 4.5% in 2018.

PwC says the broadcasters are adapting to the internet video opportunity, creating a significant new revenue stream against the competition of internet rivals.

Marcel Fenez, PwCs Global leader, entertainment and media, said: What all these markets have in common is a growing middle class boosting spending in entertainment and media. But the similarities stop there. Realising the revenue potential of these markets demands a deep understanding of the local context. The optimal approach for international players will most certainly be to collaborate with local partners.

Total entertainment and media spending on digital services is forecast to grow at a 12.2% CAGR between 2013 and 2018 and account for 65% of global entertainment and media spending growth, excluding spending on Internet access.