We have been worrying over the future of pay TV, and even if we accept the forecast of a new report, out this week from Pyramid Research (now part of Light Reading) we will continue to worry about it. Pyramid says that pay-TV subscribers will grow by 8% during the economically hard pressed 2009, to reach 733 million worldwide.
Pyramid runs a Pay TV model across 52 countries and says it tracks demands patterns for free and pay-TV services over terrestrial, satellite, and mobile platforms worldwide, providing market share information at both the technology and operator levels, as well as five-year adoption and revenue projections.
A while ago we did the numbers on about 20 countries in Europe and found cable retrenching with satellite growth slow, IPTV rampant, but all of this as nothing compared to the Free to air market growth which was not only growing in subscribers, but also in quality to rival pay TV. Globally if it wasn’t for the rampant growth of pay TV in India, mostly via satellite, and in China across all three segments, we reckon that pay TV numbers might actually be falling and wonder about the total revenue it generates, which we have long suspected is down. Pyramid goes on to say that the 8% growth it predicts is a fall from 11% previously and in the light of a 6% fall in global nominal GDP anticipated for 2009.
Ozgur Aytar, research manager at Pyramid Research says ‘Lower double-digit growth rates expected across the emerging regions coupled with the stabilizing effect of multiplay bundles and their increasing penetration particularly in mature pay-TV markets should, however, prevent the global subscriber base taking a nose dive.’
‘We started the year with a great sense of uncertainty of the impact of the economic downturn on the pay-TV market, and while much uncertainty remains, pay-TV operators’ first-quarter results published to date have not been so bad after all. Most continue to add subscribers, and those that are losing customers are doing so largely as a result of the entry of new competitors,” says Aytar.
He rightly addresses the issue of customer spending because operators have increasingly been rolling out lower, ‘economy’ Pay TV and multiplay bundle tariffs in order to retain subscribers and says that revenues will fall by 6% globally, but by as much as 20% in some of the emerging markets.
Cable TV operators are expected to generate more than half of the global pay-TV revenue in 2009 while IPTV platforms are growing the fastest especially in Western Europe, where IPTV subscribers may account for 15% of the total Pay TV base by year-end.
Elsewhere Pyramid says IPTV’s share of subscribers will remain less than 5% and Aytar adds, ‘The slowdown in the global economy has hit both capex and the speed of broadband network deployments in emerging markets’ operators are scaling back their capex by as much as 20% to 30%, and most are holding back on expansion plans.’