Pay TV Set to Continue Growth Across Western Europe
LONDON -- The number of pay TV subscribers in Western Europe increased by 1 million in 2012 to 94.1 million, and will climb by another million in 2013, according to a new report from Digital TV Research.
This comes despite pay TV subscriptions falling in Italy (down by 482,000) and Spain (down by 350,000) in 2012. Italy and Spain will experience further falls in 2013, but both countries will start to recover in 2015, the research predicts.
The Digital TV Western Europe report estimates that pay TV subscriptions in Germany rose by 689,000 in 2012 (prompted partly by analog DTH switch-off) and by 347,000 in France.
The number of pay TV subscribers in the region will top 100 million by 2018 – up by 6.9 percent since 2012.
The predicted rise will come despite the loss of 15.9 million analog cable subscriptions over the same period. Digital cable will grow by 14.7 million subs and IPTV will climb by 6.5 million, the research predicts.
However, pay direct-to-home subscriptions will only rise by 2.5 million and pay digital terrestrial television subscriptions will fall by 187,000 to 7.4 million.
In the U.K., figures given exclusively to The Hollywood Reporter indicate that pay TV revenues will hit $7.6 billion by 2018, a fall from 2013's $7.7 billion, while pay TV subscriptions will rise to 16.2 million by 2018 from 14.87 million in 2013.
The research is released in the week that John Malone's Liberty Global finalizes its deal to buy U.K. cabler Virgin Media as the U.S. giant continues to concentrate on Europe's mature markets to secure growth.
Pay TV penetration will be 57 percent by 2018 for the 15 Western European countries covered in the report, up by only two percentage points on 2012.
By 2018, pay TV penetration will range from nearly 100 percent in the Netherlands to only 24 percent in Spain. Five countries will exceed 90 percent pay TV penetration in 2018.
Report author Simon Murray said: "Despite the number of pay TV homes increasing, pay TV revenues will remain flat at about $32 billion. The pay TV arena is becoming more competitive as new platforms (especially IPTV ones) launch and as cable operators upgrade their networks to offer bundles and advanced services such as HD channels and DVRs."
Murray also said the rapid growth in higher-speed broadband connections will allow "more online video viewing."
Added Murray: "So cable operators now offer cheaper and scaled-down basic packages to retain subs and to attract new ones. The knock-on effect resulted in DTH operators also dropping their basic package prices (and are reducing channel choice)."
Direct-to-home services will remain the most lucrative pay TV platform, but its revenues will fall by 2.5 percent between 2012 and 2018 – despite subs numbers rising by 4.8 percent, the research indicates.
Cable TV revenues will decline by 6.6 percent over the same period, but subscriber numbers will also fall by 2.6 percent.
Leading the growth, IPTV revenues will climb by 28.6 percent between 2012 and 2018 to $4.2 billion, with subscriber numbers up by 41.3 percent.
With France and Italy experiencing sharp pay TV revenue declines in 2012, Germany's 9 percent uptick helped provide balance for the region.