Western Europe posted over 182 million TV households at end-2010, 40 per cent of which are watching TV via terrestrial platforms, 27 per cent via cable and about 26 per cent through satellite, either free-to-air or through paid subscription. The IPTV subscriber base represented about 7 per cent of the total base. InfoCom expects that by 2015, satellite TV will overtake cable TV in terms of TV households, with satellite platforms expected to total 52.4 million compared to cable, expected to top to 47.6 million.
Currently, the two largest satellite TV markets of the region are Germany, with almost 16 million satellite TV households, and the UK, with about 11 million satellite TV households. Both markets have significant free-to-air satellite TV viewers. UK-based BSkyB is the leader DTH provider and gained more than 10 million subscribers in 2010. Since 2008, cable in Western Europe has been experiencing a declining subscriber base.
Platforms in the region posted 49.8 million customers in 2010 and are expected to keep decreasing at 1 per cent (CAAAGR) until 2015. IPTV, on the contrary, is expected to post an annual average subscriber growth of 10 per cent between 2011 and 2015. By 2015, IPTV subscriptions in Western Europe are expected to reach more than 20 million. Looking at structural trends in the TV markets, it is apparent that TV households are gearing towards satellite TV and IPTV platforms. Despite cable’s efforts to level the playing field by utilising the “follower” strategy – for instance, adapting the bundling strategy as what IPTV players started – it seems like the effort is not enough to mitigate the downtrend.
The changing landscape of TV viewing with the emergence of connected TV and over-the-top (OTT) content may further impact the take-up of these TV platforms in the future. With native PC-based content, like online videos, made available to TV via connected TV devices, viewers are given a choice to watch only the programmes that they wish to see. After all, over-the-top content is continuously expanding to a point where most of the content that one can watch on subscription TV is available on-demand on connected TV sets without any need to maintain subscriptions to TV access providers. With this scenario, cord-cutting — when subscribers completely cut their TV subscription to any TV platform — is a possibility, which is not unlikely any longer.