North America to Add 5 Million Pay-TV Subs

LONDON: Despite a small decline in 2013, the number of pay-TV subscribers in North America is now expected to increase, with Digital TV North America forecasting 5 million additions by 2020.

However, pay-TV penetration is expected to drop from 87 percent in 2010 to 83.8 percent by 2020, as pay-TV penetration has peaked in Canada and the U.S. Subscribers did fall slightly in 2013; most of the pay-TV subscriber losses over the last few years have been analogue cable subs. There were still 18.39 million analogue cable subscribers by the end of 2010, a number that will fall to 3.75 million by the end of this year.

Digital TV penetration reached 94.2 percent at the end of 2013, and will increase to 100 percent by 2017. Of the 17 million digital homes to be added between 2013 and 2020, 5.5 million will come from cable, 5.9 million from IPTV, 4.6 million from DTT and 0.9 million from satellite TV.

TV ARPU is being forced down, as cable operators and telecos convert their subscribers to double- or triple-play bundles. Satellite TV is expected to overtake cable to become the largest pay-TV platform revenue generator in 2015. However, satellite TV revenues will increase by only $1.2 billion between 2013 and 2020, to $42.8 billion. Cable revenues will fall by nearly $13 billion in the same period (dropping by $2.5 billion this year alone).

Simon Murray, the principal analyst at Digital TV Research, said: “Pay-TV revenues [subscriptions and on-demand] in North America peaked in 2013 at $95.36 billion. We forecast that they will fall by $8.75 billion to $86.61 billion in 2020. As the analogue cable networks switch off, all pay-TV operators will try to outdo each other on promotions, with pricing becoming a more and more important tool.”