Despite all the talk of cord-cutting, a report from Digital TV Research states that the number of pay TV subscribers in the US will continue to increase – albeit at a slow rate. However, the Digital TV North America report states that pay TV penetration will remain flat.
Simon Murray, report author, said: “Most of the pay TV subscriber losses over the last few years have been analogue cable subs. Nearly 20 million analogue cable subscribers were shed between 2008 and 2012. Most of the remaining analogue cable subscribers are either reluctant to pay more for digital packages or they are just not that interested in TV. These subscribers will only make the decision to convert to digital when there are no other options.”
Pay TV penetration has reached saturation point in Canada and the US, so pay TV operators will continue to fight between themselves for new subscribers. Despite flat pay TV penetration, the number of pay TV subscribers will climb by 7.5 million between 2012 and 2018 to 119.5 million. Subscriber numbers will increase by 1.5 million in 2013 alone.
Murray continued: “However, pay TV revenues [subscriptions and on-demand] peaked in North America in 2012. We forecast that they will fall by $5.3 billion to $83.7 billion in 2018. 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. But it won’t end there. As the analogue cable networks switch off, operators across all of the digital platforms will try to outdo each other on promotions, with pricing becoming a more and more important tool. Satellite TV [DTH/DBS] will overtake cable to become the largest pay TV platform earner in 2017.”