In a growing number of pay-TV markets around the world, service providers are expanding market presence by offering their own over-the-top (OTT) video services, with the net result of slower revenue growth.
This is according to Jeff Heynen, research director for broadband access and pay-TV at research firm IHS. Heynen says slower revenue growth can be attributed to the proliferation of OTT services, which generally carry a lower average revenue per user (ARPU).
"Pay-TV providers are also actively marketing 'skinny' bundles of 10 to 30 channels in more affordable packages."
In SA, MultiChoice has introduced Internet services that include a mobile app and a video-on-demand-like product that allows subscribers to download movie content from an online catalogue.
The only other pay-TV provider in SA, StarSat, has so far failed to gain traction, leaving MultiChoice with 95% of the market. MultiChoice has monopolised pay-TV since it launched DStv in 1995 - a move that was instigated nine years prior with the introduction of SA's first subscription TV station, M-Net.
The global pay-TV services market, including satellite TV (like DStv), cable TV (a main means of pay-TV provision in the US), telco TV (MTN's FrontRow) and OTT video (Netflix, Hulu, Vidi, Altech Node) was worth $237 billion in 2014, up 7% from the previous year, according to the 2015 IHS Infonetics Pay-TV Services and Subscribers report.
These are some of the global pay-TV market highlights, from IHS' research:
1. Global pay-TV subscribers ballooned to nearly 800 million in 2014 (up 5%).
2. For the first time in pay-TV history, the OTT pay-TV segment provided the strongest growth.
3. Over the five years from 2014 to 2019, OTT pay-TV services are forecast by IHS to have the highest compound annual growth rate (CAGR) of any pay TV service.
4. Cable pay-TV revenue growth slowed to 1.8% in 2014, largely due to sluggish subscriber growth in North America, where net video subscribers are declining around 1% to 3% annually.
Share