IHS: OTT Video Services Added Three Times More Subs than Pay TV

OTT subscription video services around the world added more than three times the number of subscriptions than pay TV did last year, according to IHS Markit.

Nevertheless, digital pay-TV subscriptions around the world—including cable, satellite and IPTV—surpassed 1 billion for the first time in 2017.

“Although pay TV reached a new high, OTT net-subscriber additions outstripped net pay-TV subscriptions in most regions globally,” said Fateha Begum, associate director of television media at IHS Markit. “Traditional pay-TV operators have shown resilience in the face of increased competition, through continued investment in set-top functionality, exclusive content and on-demand services.”

Digital pay-TV growth came largely from the Asia-Pacific region, which accounted for 83 percent of net additions, largely driven by IPTV growth in China. Led by an increase in smartphone penetration and improvements in mobile data accessibility and affordability, there were three new OTT subscriptions for every new pay-TV subscription in 2017 in the region.

In comparison, Western Europe added eight OTT subscriptions for every pay-TV net addition, while in Central and Eastern Europe the number of OTT and pay-TV net additions were equal.

While OTT penetration remains low in the Middle East and Africa, the region is forecast to grow rapidly in the coming years. “We expect to see OTT subscriptions growing globally over the next five years, as Amazon and Netflix continue to invest in local and localized content, and as virtual pay-TV operators start to appear and grow outside the U.S.,” said Irina Kornilova, principal analyst of home entertainment at IHS Markit.

Unlike other regions, digital pay-TV subscriptions in North America continued to decline, losing 3 million homes in 2017, while OTT subscriptions increased by nearly 30 million. “Pay-TV services in North America continue to be affected by cord cutting, primarily due to higher average prices for pay-TV subscriptions, compared to other global regions,” Begum said.