Despite the rising US trend of cord cutting, the European cable market continued to expand in 2010, with revenue throughout the EU rising by nearly 8 per cent for the year on the strength of double-digit growth in digital television, broadband and telephony subscribers, according to the IHS Screen Digest.
Total European Union cable revenue in 2010, including television, telephony and Internet, amounted to €18.7 billion, up 7.9 per cent from €17.3 billion in 2009, as presented in the figure below. Growth was propelled by several factors, including a 15.8 per cent increase in digital cable subscribers, a 10.8 per cent rise in telephony customers and a 10.5 per cent boost in Internet users. These strong results caused total E.U. cable revenue generating users-i.e. the number of individual service subscriber contracts-to rise above the 100 million level for the first time in 2010, reaching 101.1 million, up 3.2 per cent from 97.9 million in 2009.
“Cable is a capital-intensive business but these numbers prove unequivocally that our investments were made in the right places at the right time,” said, Caroline Van Weede, Cable Europe Managing Director. “Across Europe we are seeing healthy growth in our key metrics, with cable operators increasingly coming to be seen be as value added service providers rather than utilities, as they may have done in the past.”
The continued expansion shows the European cable market is resisting the impact of the trend of consumers cancelling their traditional pay television services and turning to Internet-based alternatives, a rising phenomenon known as “cord cutting.”
“Cord cutting is having a major impact on the global cable market-particularly in the United States, where it is starting to cause a decline in subscribers,” said Guy Bisson, research director, television, for IHS. “However, the 2010 results for the European Union show that cord cutting doesn’t mean the end of the world. Strong increases in E.U. cable Internet and telephony subscribers are more than compensating for increasing competition in the cable television business.”