North American Pay-TV Revenues Projected to Decline by $12 Billion

LONDON: Pay-TV revenues in North America are said to have peaked in 2013 at $102.86 billion, with the latest forecast from Digital TV Research showing declines on the horizon.

The Digital TV North America report projects pay-TV revenues (subscription and on-demand) will fall by 11.7 percent, or $12.04 billion, between 2014 and 2020, when the total will come to $90.71 billion.

Cable revenues in North America are forecast to drop by $12.98 billion, with $3.66 billion less from analog cable and $9.32 lower for digital cable. Satellite TV is expected to lose another $1.23 billion, though IPTV will increase by $2.17 billion. There were 67.8 million cable TV subs in 2010, of which 17.5 million were analog, but this total will fall to 56.6 million by 2020. Satellite TV is set to overtake cable to become the largest pay-TV platform earner in 2019. However, satellite TV revenues will fall by $1.2 billion between 2014 and 2020, to $40.69 billion.

The number of homes paying for IPTV will increase by 23 percent between 2014 and 2020 to reach 18.05 million, or to 13.5 percent of TV households. The number of traditional pay-TV subs will remain flat at 110 million. However, pay-TV penetration will drop from 86.7 percent in 2010 to 82.6 percent by 2020 as the number of TV households increases. The number of homes not paying for TV services will increase from 18.9 million in 2010 to 26.3 million in 2020.

Digital TV Research forecasts that OTT revenues will reach $10.39 billion in 2020, up from $6.85 billion in 2014 and $2.02 billion in 2010. These figure do not include advertising revenues for the OTT players. The number of SVOD subscribers will reach 66.85 million in 2020, up from 50.62 million in 2014 and 16.68 million in 2010. SVOD revenues will reach $6.91 billion in 2020, up by $2 billion on 2014.

Simon Murray, principal analyst at Digital TV Research, said: “We do not see the OTT revenues coming solely at the expense of traditional pay TV. Most of the revenues will come from existing pay-TV subscribers.”