Cable’s TV reign under serious threat from satellite, IPTV

Michelle Clancy ©RapidTVNews | 02-11-2011

The global pay-TV market, including telco IPTV, cable and satellite video services, totaled $125 billion in the first half of 2011 and is forecast by Infonetics Research to grow to $353 billion by 2015.
The ongoing cable subscriber drain shows little sign of abatement: most of the future growth in the pay-TV market will come from satellite video and telco IPTV services, Infonetics said.

Net new cable video subscribers will continue to decline in North America and EMEA, and the small increases in Asia and Central and Latin America aren't offsetting those declines.
"In 2008, cable video made up 59% of the global pay TV market, satellite video brought in 38% and IPTV was just a drop in the bucket,” said Jeff Heynen, directing analyst for broadband access and video at Infonetics Research. “We do expect cable video's share of pay-TV revenue to decline as satellite video increases -- nearly catching up to cable by 2015 -- while IPTV services grow to 15% of the market."
As for over the top (OTT) competitors like Netflix and Amazon On Demand, and connected TV devices like Roku, Heyden said that consumers are indeed cutting the cord. However, “we don't expect OTT to have a significant impact on pay-TV subscribers because operators are responding to OTT with their own enhanced delivery offerings,” he added, referring to the move by many operators to embrace a hybrid strategy of combining linear broadcast and Internet-based content via an operator-branded set-top box.

As far as market sizing, Infonetics found that North America remains the highest-value pay-TV market, benefitting from the highest average revenue per user (ARPU), followed by Asia Pacific, which benefits from a pay TV subscriber base nearly four times the size of that of North America
DirecTV and Comcast are the global market leaders for pay-TV service revenue and subscribers in 1H11, respectively, with DirecTV continuing to enjoy the highest ARPU in the industry and Comcast now with 22.5 million subscribers
In the first half of 2011, the top 20 pay-TV revenue leaders accounted for 52% of the revenue, while the top 20 subscriber leaders represented just 29% of the subscribers.