Spain’s deep economic recession continues to take its toll of its pay TV industry with subscription falls across all the four main sectors in Q1 2013. The biggest percentage loser was terrestrial TV, shedding just over 30,000 or 10.39% of its 366,000 base, while surprisingly IPTV came next with a 6.8% decline to 724,000.
This is well down from its peak of 891,000 at the start of 2012, which was about when the decline in both GDP and pay TV began after a temporary rally in the former during 2011. Cable TV lost just 2.35% in the quarter to stand at 1.24 million, while satellite faired best with a 1.66% fall to 1.69 million mostly delivered as the Canal+ service from Prisa Group.
The IPTV figures partly reflect the problems Telefonica has had across Europe, accounting for almost all the Spanish IPTV losses. Over Europe as a whole Telefonica’s pay TV base shrank by 17% in the first quarter to stand at 852,000. It has yet to be seen whether the Telcos’s recently launched IPTV service in Spain called Movistar TV, with a friendlier user interface and expanded content lineup, along with TV Everywhere, will help reverse the decline. This will depend more on the fate of the Spanish economy, which has shown that while pay TV may be resistant to small recessions, as people stay at home to watch TV as a cheaper alternative to the cinema or eating out at restaurants, it is not immune to a full blown slump.
The decline in Spanish GDP reached a peak of 0.5% in Q1 2012, passing the 2% annual rate for the first time, while unemployment also reached a new high of 27.2% and was over 50% among young people in some regions. The only slight hint of a recovery came in a forecast from accountancy and consulting group Ernst & Young in June 2013, with an assertion that the Spanish economy seemed to have bottomed out and was ready to start growing again. Ernst & Young estimated that the Spanish economy would end up falling by 1.7% this year, but rebound by 0.2% in 2014 and grow by 1.5% between 2015 and 2017. As with all such forecasts this tends to ignore the possibility of further turmoil in the Eurozone, but reflects the government’s efforts to cut the deficit and relative lack of opposition to the moves.
While there is no doubt over Spain’s figures as they come directly from the regulator, analysts have been at odds over whether pay TV subs across the whole of Europe have been rising or falling recently. To us they look almost flat, with losses in Spain, Italy and one or two other regions cancelling out rises in parts of Eastern Europe, with the major markets of Germany, the UK and France all quite level.