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Study: Pay TV Industry Sees First-Ever Subscriber Decline in Western Europe

Television being thrown out - H 2012
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In a report that could kick off the cord-cutting debate in Europe, Informa cites more than 380,000 customer losses, with a U.K. gain unable to offset big drops in Spain and Italy.

LONDON -- The number of pay TV subscribers in Western Europe dropped by 384,000 last year, the first decline since the launch of the industry in the 1980s, according to research firm Informa.

The U.K. reported a subscriber gain for 2012, but that was outweighed by drops elsewhere, including big declines in Spain and Italy. In the Southern European nations, financial crisis and a weak economy also have been a drag on box-office trends and TV advertising spending.

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While the cord-cutting debate has long been raging in the U.S., with some observers blaming a weak economy and online alternatives as driving forces, the report might kick off a similar discussion in Western Europe.

The region ended 2012 with about 92.6 million pay TV subscribers, down from 93 million at year-end 2011, Informa Telecoms & Media said.

However, the firm also forecast that pay TV subscribers in Western Europe would rise to 94 million this year.

Adam Thomas, Informa’s media research manager, said the driver of the 2012 decline was not so much online competition but the weak economy. "It’s a wake-up call to the industry that confirms pay TV growth is no longer insulated against economic downturns," he said.

"The heaviest losses were experienced in markets like Italy and Spain, where the Eurozone crisis has been hitting hard."

While the U.K. added 190,000 pay TV customers, Italy led Western Europe in terms of subscriber declines, losing 800,000 users last year, according to Informa. Spain ranked second with 261,000 lost subscribers.

Meanwhile, the pay TV subscriber base in Germany fell by 180,000 last year, and France lost 3,000 users.

Said Informa senior analyst Ted Hall: "While these findings are unwelcome, they should not be overstated. There were a fairly unique set of fiscal circumstances in play last year, and as economic recovery kicks in, pay TV subscriber numbers will return to growth."

He added: "While the 2012 drop injects some caution, there is no suggestion the wheels are coming off the pay TV bandwagon."