Television Subscriber and License Revenue to Grow 5.4 Percent Annually Through 2016 (Report)
Revenue generated from television subscription and license fees in the United States should rise about 5.4 percent a year to $92.9 billion annually in 2016, according to PricewaterhouseCoopers. In the same time frame, the video game market will grow by 4.1 percent a year to $16.4 billion.
PwC releases its Global Entertainment and Media Outlook report Tuesday. The Hollywood Reporter was provided an advance look at the chapters concerning video games and TV.
As for the latter, cable penetration is expected to sink from 52.3 percent of U.S. households in 2011 to 47.9 percent in 2016, while telephone-TV households, led by AT&T and Verizon, rise from 7.4 percent to 16 percent and satellite households move slightly from 28.1 percent to 28.2 percent.
The overall growth in the U.S. TV market will come despite over-the-top services like Netflix and Hulu, whereby TV shows are delivered over the Internet. PwC also has taken into account Google’s planned service – being tested this year in Kansas City, Missouri. Sony is also considering an Internet TV service and Amazon.com has launched a video-streaming library with content from CBS and NBC.
As for video games, the console handheld market in the U.S. should grow by 1.9 percent a year to $9.7 billion annually by 2016, the online market by 9 percent to $3.2 billion, and the wireless game market by 7.1 percent to $1.4 billion.
PwC noted that the online category is dominated by World of Warcraft, even though its subscribers have shrunk from 12 million at its peak to 10 million people who pay $15 monthly.
Star Wars: The Old Republic launched on Dec. 20 and garnered 1 million subscribers in its first 12 days, though the game was free for a month and $15 monthly thereafter. “It remains to be seen how successful the game will be and if the subscription model still has staying power,” says PwC.
The alternative, PwC notes, is the trend of allowing users to play massively multiplayer online games for free while charging for microtransactions, as is the case with Battlefield Heroes and Need for Speed World.
As for wireless games, PwC says that the iPhone App Store “revolutionized” the market, going from 5,000 games offered in October, 2008 to 75,000 by the end of 2011.
“The iPad is becoming the platform of choice for many gamers,” PwC says. “The Android mobile device market has skyrocketed because of lower prices relative to the iPhones. These phones provide another platform for gamers.”