As research firm IHS Markit and Cable Europe released a report suggesting that the European cable industry continued to show resiliency and steady growth in 2016, Mohammed Hamza, Senior Research Analyst for Kagan research has given a more sober assessment of the growth potential for the sector.
Delivery an Industry Overview at the S&P Global European Multichannel Summit in London, Hamza suggested that in certain markets where there was a strong free-to-air broadcast presence, this was impacting on multichannel penetration rates.
He also suggested there was little prospect of local or major SVoD challengers to players such as Netflix and Amazon, although the planned launch of a Disney-branded direct-to-consumer streaming service in 2019 stood the best chance with its access to a broad range of content. “They have TV series, they’ve got ESPN, they’ve got cross-selling and cross-promotion and theatre. Throw into that Star Wars and Marvel and that’s going to be quite a powerful proposition. I don’t think there many players can come to the market at this stage with that content.
Turning to the cable sector, he admitted: “It’s a depressing picture from cable. There’s still a bit of analogue cable in places such as the Nordics and Germany and Austria. There’s not been much opportunity for growth beyond broadband,” he suggested, noting that some operators were moving into serving the small and medium enterprise size business. “It’s a massive opportunity on that side mainly because telcos are targeting the bigger corporations, so there’s a really big opportunity there. However, from an organic growth perspective, Hamza said that the industry had seen acquisition happen in cable, “more so than other platforms, but there’s really very little room for growth beyond acquiring another player, partly because of the attractive bundles that IPTV players are able to offer.”