North American pay-TV revenues set for $3bn drop
Pay-TV revenues in North America will fall by $3 billion between 2010 and 2016, according to a new report from Digital TV Research (DTVR). The Digital TV North America report estimates that the total in 2016 will be $67.2 billion, but this is down from a high point of $71.3 billion in 2009. 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.
Report author Simon Murray noted that DTH became the largest pay-TV earner in 2010, by overtaking cable’s combined total. DTH [DBS] revenues will reach $37.2 billion in 2016, up just over $2 billion on the 2010 total. The number of pay DTH households will increase by 3.5 million between 2010 and 2016 to reach 39.8 million. However, DTH penetration will not change too much, settling at 29.2 per cent by 2016.
According to DTVR, cable TV revenues will fall $8 billion between 2010 and 2016 to $25.6 billion. Analogue cable TV revenues of $9 billion in 2010 (already down from $17 billion in 2006) will reduce to zero by 2016, though digital cable TV revenues will rise $1 billion over the same period to reach $26 billion.
Murray observed that pay-TV penetration was already at saturation point, at just below 90 per cent of TV households. “Despite no movement in the penetration figure, the number of pay-TV subscribers will climb 8 million between 2010 and 2016 to 122 million,” he predicted.
Digital penetration reached 86 per cent at end-2010, and will increase to 100 per cent by 2016. Most of the growth will be in Canada. Of the 25 million digital homes to be added between 2010 and 2016, 15 million will come from cable, 7 million from IPTV, 3 million from DTH and 1 million from DTT.
There will be 68 million cable homes (all digital) by 2016, down from 71 million (of which 53 million were digital) at end-2010. Cable penetration will be 49.8 per cent by 2016, down from 55.7 per cent at end-2010.
The number of homes paying for IPTV will double between 2010 and 2016 to reach 14 million – or just over 10 per cent of TV households. IPTV revenues will more than double to $4.4 billion by 2016.
DTT has already reached saturation point, at 9 per cent penetration of TV households. Primary DTT households (homes not subscribing to cable, DTH or IPTV but taking DTT) will increase by only 1 million between 2010 and 2016 to reach 12.8 million.