North American Pay-TV Revenues Forecast to Fall

LONDON: Digital TV Research says in a new report that pay-TV revenues in North America will drop by $5.3 billion in the next five years, even though the number of subscribers is forecast to rise to 119.5 million.

In the U.S. and Canada, the number of pay-TV subscribers is expected to increase to 119.5 million in 2018, with 1.5 million additions this year alone. Digital cable will continue to dominate, accounting for 63.9 million customers in 2018, followed by 39 million for pay DTH, 17.9 million for free-to-air digital terrestrial and 7.3 million for pay IPTV platforms.

“Most of the pay-TV subscriber losses over the last few years have been analog cable subs," said Simon Murray, author of the report. "Nearly 20 million analog cable subscribers were shed between 2008 and 2012. Most of the remaining analog cable subscribers are either reluctant to pay more for digital packages or they are just not that interested in TV. These subscribers will only make the decision to convert to digital when there are no other options.”

Penetration rates will remain flat, with operators fighting amongst themselves for new customers. Revenues are expected to fall to $83.7 million in 2018, with DTH generating $39.9 billion, digital cable $36.6 billion and IPTV $7.2 billion.

"TV ARPU is being forced down as cable operators and telcos convert their subscribers to dual-play or triple-play bundles, though blended [overall] ARPU is rising," Murray noted. "But it won’t end there. As the analog cable networks switch off, operators across all of the digital platforms will try to outdo each other on promotions, with pricing becoming a more and more important tool. Satellite TV [DTH/DBS] will overtake cable to become the largest pay TV platform earner in 2017.”