Cord-cutting fails to make impact in Western Europe

DetailsJoseph O'Halloran | 27 April 2015

In the US at least 2015 has to date been the year of over-the-top, but in Western Europe cord-cutting is not expected to make much of an impact, according to a new report from Digital TV Research.

sky 1The analyst's Digital TV Western Europe Forecasts report found that despite signs of maturity within the OTT market in the region, pay-TV penetration is expected to grow from 56.7% at end-2014 to 60.4% in 2020. The would mean that contrary to all of the doom and gloom associated with pay-TV, subscribers will have climbed by 2.57 million in 2015 to 99.00 million as Western Europe begins to shrug off the recession. Between 2014 and 2020, pay-TV subscriptions are set to increase by 8.38 million (up 8.7%) to 104.81 million with the number of digital pay-TV subscribers climbing by 23.1% (nearly 20 million), with analogue cable subs falling from 11.31 million in 2014 to zero by 2019.

The report showed that satellite TV will remain the most lucrative pay-TV platform, but that revenues will fall every year despite subs numbers rising. By contrast, paying IPTV subscriber numbers are set to overtake pay satellite TV ones in 2015 with IPTV subscriptions rising by 8.6 million (up 37%) between 2014 and 2020 compared with 1.2 million additions for pay satellite TV (up 5%) and 0.3 million for pay DTT (up 6%). Cable TV are though set to lose $1 billion (down 8.6%) between 2013 and 2020 although subscriber numbers are also set to fall by 6.1%). That said, digital cable subs are set to will increase by nearly 10 million (up by 30%) over the same period.

Amassing $7.574 billion, the UK is set to be the region's most lucrative pay-TV market in 2020 despite the fact that Germany will have the most pay-TV subs by 'some distance' said the report. France and Italy are set to generate near to Germany's $4.460 billion despite having fewer pay-TV subs.

Commenting on the Digital TV Western Europe Forecasts report and what that would mean for the industry in financial terms, Simon Murray, Principal Analyst at Digital TV Research, said: "Despite the number of pay TV homes increasing, pay TV revenues will remain flat at around $32 billion. ARPU is falling in most countries and on most platforms. The pay-TV arena is becoming more competitive as newer platforms (especially IPTV ones but also including OTT/SVOD) launch. Greater competition means cheaper channel packages. Bundling increases overall ARPU for operators, but leads to lower TV ARPU."