Technology

Satellite TV to overtake cable TV revenue by 2016: Study

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MUMBAI: By 2016 satellite TV revenue will overtake cable TV revenue for the first time.

Market research firm Infonetics Research released excerpts from its November 2012 Pay TV Services and Subscribers report, which forecasts and analyzes the telco Internet protocol television (IPTV), cable video, and satellite video services markets.

The global pay-TV market (cable, satellite, and telco IPTV) totaled $137 billion in the first half of 2012 (1H12), a 9.4 per cent increase over the same time last year. Global pay-TV service revenue is forecast by Infonetics to grow at a seven per cent CAGR from 2011 to 2016, spurred by emerging markets India, Brazil, Argentina, Mexico, Russia and China.

Latin America, the smallest but fastest-growing pay-TV market, is on track to jump by 23 per cent this year to top $23 billion. The number of global pay-TV subscribers will reach 719 million in 2012, up by six per cent from 2011.

While cable subscribers continue to make up the lion’s share (60 per cent in the first half of the year) of pay-TV subscribers, growth is strongest in the telco IPTV segment, up by 19 per cent in the first half of this year over the second half of last year.

Verizon and AT&T are neck-and-neck for revenue share in the fast-growing telco IPTV market, followed by France Telecom and Deutsche Telekom in Europe and NTT and CTC in Asia Infonetics Research directing analyst for broadband access, pay TV Jeff Heynen said, “Ongoing challenging economic conditions in the key revenue-generating markets of North America and Western Europe have resulted in slowing subscriber and revenue growth in the cable TV market”.

Subscribers are far less loyal than they used to be. The cable TV industry is characterised more by churn than cord cutting, as subscribers take advantage of introductory pricing on satellite and IPTV subscriptions that’s 30-50 per cent below their cable bills. “DirecTV, Verizon, AT&T, and Virgin Media have all set their sights on existing cable subscribers, and they’re seeing their subscriber bases increase as cable TV subscriptions shrink,” Heynen said.

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