Subscribe

Over-the-top to dominate pay-TV services

Staff Writer
By Staff Writer, ITWeb
Johannesburg, 22 May 2015
Catch Up Plus, DStv's online VOD service, was launched for in November last year, for MultiChoice's only connected decoder the Explora.
Catch Up Plus, DStv's online VOD service, was launched for in November last year, for MultiChoice's only connected decoder the Explora.

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