Half of European pay-TV operators to take revenue hit
Joseph O'Halloran
| 08 October 2014
The growing emergence of online TV and video platforms will be a key driver to a fall in pay-TV subs and revenues by the end of 2014 says a report from Digital TV Research.

The survey also cites general greater competition and analogue cable subs failing to progress as expected to other digital options as holding back a pay-TV market that has seen a flurry of M&A activity over the last year. At the vanguard of these is BSkyB's proposed acquisition of 21st Century Fox's stakes in Sky Deutschland and Sky Italia and Liberty Media's march on the continent's cable industry.

Despite BSkyB's plans to encourage German and Italian subscribers to take up value-added services, and Liberty Global's efforts to do the same, the European Pay TV Operator Forecasts predicts that subscriber numbers will have fallen for 40 of the continent's operators between 2013 and 2020.

It calculates that even though total subscription and video-on-demand (VOD) revenues for the 103 operators increased from $33.7 billion in 2010 to $35.8 billion in 2013, this total will only grow to $36.2 billion by 2020. These operators accounted for 91% of European pay TV revenues in 2013.

Moreover it predicts that subscription and VOD revenues will fall for 50 of the 103 operators (49%) between 2013 and 2020, including six of the top ten operators. These revenues are for subscriptions and VOD only, and therefore do not include other revenues such as broadband, telephony, advertising, equipment sales and rental among other sources.

Despite remaining at the top of the revenue league BSkyB, recording $6.44 billion subscription and VOD revenues by 2020, and Liberty Global will be among the highest revenue losers though not on the scale of France's CanalSat which is predicted to lose $355 million between 2013 and 2020. The largest gainers will likely be Sky Deutschland, Kabel Deutschland and Sky Italia.

Revenues will more than double for Telecom Italia, Bulgaria's Vivacom, Greece's OTE and Hungary's MinDig. Russian satellite TV platform Tricolor is also set to be a big winner.