OTT Driving Global Pay-TV Services Market

CAMPBELL: Global pay-TV subscribers increased to nearly 800 million in 2014, led by, for the first time ever, the OTT segment.

According to the 2015 IHS Infonetics Pay TV Services and Subscribers report from IHS, the global pay-TV services market—including cable TV, satellite TV, telco TV and OTT video—totaled $237 billion in 2014, up 7 percent from the previous year. Global pay-TV subs rose 5 percent, with the OTT pay-TV segment providing the strongest growth. IHS is now predicting that over the five years from 2014 to 2019, OTT pay-TV services will have the highest compound annual growth rate (CAGR) of any pay-TV service.

Cable pay-TV revenue growth slowed to 1.8 percent in 2014, largely due to sluggish subscriber growth in North America, where net video subscribers are declining around 1 to 3 percent annually.

Jeff Heynen, the research director for broadband access and pay TV at IHS, said: “In a growing number of pay-TV markets, service providers are expanding market presence by offering their own OTT video services, primarily as apps on tablets and third-party OTT media servers. Dish Networks, the second-largest satellite provider in the U.S., is offering an OTT video service called Sling TV that’s aimed squarely at cord-cutters and cord-nevers. The net result of these offerings will be slower revenue growth globally as OTT services carry a lower ARPU.”

“Pay-TV providers are also actively marketing ‘skinny’ bundles of ten to 30 channels in more affordable packages. Verizon has gone so far as to introduce multiple bundles of channels that subscribers can add on top of their base channels to create a custom channel lineup,” Heynen added.