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North America to lose fewer pay-TV subs

The number of pay-TV subs in North America [Canada and the US] will fall from 112 million in the peak year of 2012 to 106 million in 2021, according to the fifth edition of the Digital TV North America Forecasts report.

According to Simon Murray, Principal Analyst at Digital TV Research, at first glance, this does not indicate a massive cord-cutting problem. However, he forecast the number of non-pay-TV homes will climb from 20.7 million to 33.3 million over the same period [as the number of households will continue to increase]. “To put it another way, pay-TV penetration will drop from 87.1 per cent in 2012 to 80.3 per cent in 2021,” he advised.

The number of pay-TV subscribers declined by 2 million in 2015. Before 2015, much of the pay-TV fall was attributed to the loss of analogue cable subscribers (which still fell by 1.1 million in 2015). However, the number of IPTV subs fell slightly in 2015, with satellite TV losing 610,000 subscribers.

“2015 was notable because subscriber losses were recorded for all of the major platforms: cable, satellite and IPTV,” Murray noted. “Cable has been losing subscribers since 2011. Satellite TV started in 2014, and IPTV joined them in 2015.”

Much of the IPTV loss is attributable to AT&T encouraging its U-Verse subscribers to switch its DirecTV satellite platform. However, not even this bonus was enough to stem the loss of satellite TV subscribers.

Despite these gloomy facts, fewer than 2 million pay-TV subscribers will be lost between 2016 and 2021, suggests the research firm.

Pay-TV revenues [subscriptions and on-demand] in North America peaked in 2015 at $111.64 billion. Digital TV Research forecasts that revenues will fall by 12.1 per cent – or $13.54 billion – to $98.10 billion in 2021. Cable revenues will decline by $10.76 billion – $2.14 billion less from analogue cable and $8.62 billion lower for digital cable. Satellite TV will lose a further $2.13 billion, and IPTV $0.65 billion.

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