Cable Congress began with the usual release of numbers for the industry in Europe, always painfully focusing on the positive, and virtually ignoring the fall away in pay TV subscribers – this year’s highlight was that revenue is up 2.4% to €23.43 billion but it failed to give out figures for pay TV falls. The numbers are put together by IHS for Cable Europe and were released at the opening of Cable Congress in Dublin.
If these were Netflix numbers you would not see Reed Hastings boasting about such low growth figures – he’d be apologizing.
But the first graph in the presentation shows how cable is focused on past glories, not the immediate future in Europe, trying to set a “one decade” timeframe to demonstrate growth, to make the industry look healthier than it is. Everyone knows that pay TV is challenged by OTT, that fixed line telephony is falling, and that most European cable networks continue to play second fiddle to telco networks in broadband.
But on a one year basis this graphic shows it all, that TV has gone up in revenue, but only because customers are charged more – same as the US – and that broadband has grown at just double that rate 4.97%, achieved after watching both pay TV and telephony numbers fall away. The case for cable to enter the congested mobile markets is perhaps evident in these numbers, but the truth is that even mobile revenues are beginning to deal in single digit growth figures, so perhaps the answers are not even there.
IHS pointed out that 74.7% of cable TV subscribers in Europe are now digital, and that these generate some 85% of cable TV revenues. Hidden in here is the 18.5% increase in VoD revenue, which means that copying the innovation represented by Netflix and co, is what has really driven growth in cable in Europe.
Cable Europe claims that cable, not Digital Terrestrial TV (DTT), is the leading primary mode of TV reception among European households although most broadcasters would argue with this, as in the UK, France and Germany – the three largest European economies, more homes say that DTT or Free DTH is their primary source of TV and cable is second by a long way. Only in Germany is this not obvious, where free to air channels are often distributed over cable for minimal payments because of antennas rules within MDUs. This is nothing like the US, where cable really does rule. For instance in broadband, cable is only the dominant form of delivery in Belgium and the Netherlands, but in no other European country.
Cable Europe President Manuel Kohnstamm commented: “The European cable industry continues to grow steadily at 2.4% in very competitive markets. Adapting to constant change and disruption, cable keeps delivering high-end broadband and digital tv services for its customers, thanks to years of investment in innovation and infrastructure.” This despite the fact that the company that employs him, Liberty Global, is known to be on the look-out for assets sales across the board in Europe.