[Satellite News 11-02-11] The cable sector’s position in the global pay-TV market is being threatened by satellite and IPTV gains, according to a forecast study issued Nov. 2 by broadcast market analytics firm Infonetics Research.

   The forecast analyzed the telco IPTV, cable video and satellite video services sectors. The results showed that the global pay-TV market, currently worth $125 billion at the halfway mark of 2011, is set to grow to $353 billion by 2015. That growth, however, will mostly be driven by satellite and IP pay-TV operators, with cable operators’ share of that market set to decline, according to Infonetics Research Directing Analyst for Broadband Access and Video Jeff Heynen.

   “In 2008, cable video made up 59 percent of the global pay TV market. Satellite video brought in 38 percent and IPTV was just a drop in the bucket. Now, cable operators are being challenged not only by attractive pricing and services from IPTV and satellite operators, but by all over-the-top (OTT) video services like Netflix and Amazon On-Demand, as well as by connected-TV devices, which are prompting consumers to cut the cord,” Heynen wrote in the report.

   New cable video subscriber additions have continued to decline in North America and EMEA regions since 2008, according to similar reports. Heynen’s research showed that small increases in new cable customers in Asia and Central and Latin America are not offsetting those declines.

   “We don’t expect OTT to have a significant impact on pay TV subscribers because operators are responding to OTT with their own enhanced delivery offerings. We do, however, expect cable video’s share of pay-TV revenue to decline as satellite video increases ­— nearly catching up to cable by 2015 — while IPTV services grow to 15 percent of the market,” Heynen said in the report.

   Infonetics Research also highlighted the regional performance of the global pay-TV market, including telco IPTV, cable and satellite video services. The firm concluded that North America remained the highest-value pay-TV market, as it benefitted from the highest average-revenue-per-user (ARPU) rate, followed by Asia Pacific, which maintains a pay-TV subscriber base that nearly quadruples its counterpart in North America. DirecTV and Comcast remained the global market leaders for pay-TV service revenue and subscribers, respectively, in the first half of 2011. DirecTV enjoyed the highest ARPU in the industry and Comcast held the largest overall customer base at 22.5 million subscribers.

   Heynen said the top 20 pay TV revenue leaders accounted for 52 percent of the market’s total revenue, while the top 20 subscriber leaders represented just 29 percent of all subscribers.

   DTH revenues were forecasted to skyrocket past the sector’s 2010 $71 billion mark to reach $86 billion in 2016 and command nearly half of global pay-TV revenues, according to a similar study issued in June by Digital TV Research. That report also forecasted a continued relative decline in the cable TV arena, which would allow the satellite industry to surpass its rival broadcast platform in five years. Digital TV Research’s study projected cable TV revenues to fall by $7 billion to $69 billion.

   “At current growth levels, pay-TV revenues will have increased by 12 percent year-on-year by the end of 2016, resulting in a total of $173 billion in 2016. This is an indication of the enduring strength of the pay-TV market, even in the face of the biggest economic contraction for a number of generations,” Digital TV Research said in its report.

   Digital TV Research, however, differed from other reports in its findings that in-round subscription revenues would dip as more homes convert to low-cost programming packages. “Outside of the key pay-TV sub-sectors, video on-demand revenues are set to increase much faster than subscription revenues, however, these revenues will amount to only $5.7 billion — or 3.3 percent — of the total by 2016.”

   Digital TV Research also warned that cable operators could gain extra revenues by converting subscribers to bundles and riding a wave of digital cable revenue growth, especially in Asia, where digital cable TV revenues are expected to increase from $43 billion in 2010 to 62 billion in 2016. “China will add $4.3 billion in digital cable TV revenues over the same period, followed by Japan with an extra $2.6 billion,” the report said.