Pay-TV Continues to Serve as Boon for Satellite Industry

By Via Satellite | May 30, 2013



[caption id="attachment_260" align="alignleft" width="300"]Satellite Dish Image Credit: Trinity Holding Ltd.[/caption]

[Satellite TODAY 05-28-13] By 2017, pay-TV households across the globe are expected to reach more than one billion —a sharp increase over the 850 million projected before the end of 2013, said Michelle Abraham, a senior analyst with Multimedia Research Group (MRG) during an exclusive interview withSatelliteTODAY.com.
     The increase, revealed in MRG’s May, 2013 report, indicates that while global satellite TV service subscribers grew solidly in 2012, there was a marked increase in demand for pay-TV satellite services in emerging markets.
     To date, the global satellite pay-TV industry has already reached 202 million households, reflecting an 8 percent increase in 2012. Abraham said it is foreseeable that the trend is likely to continue, predicting a 9 percent increase by the end of 2013.
     According to the report, satellite TV service, surprisingly, came in second to Internet protocol television (IPTV), which saw the biggest increase in new customers. Abraham said she was shocked IPTV growth was greater than expected, considering few new IPTV services have been launched.
  Not as surprisingly to experts, some regions reflected greater growth than others. “There are areas in China and Latin America that are continuing to grow," Abraham said, while noting that places like Western Europe saw little to no growth. The slowest growth among technology groups was seen in the cable industry, she said.
     Based on the report’s findings, Abraham remains optimistic that consumer satellite TV demand will continue to grow globally but notes that certain markets, such as India and Russia, are likely to have a slower growth pace, while others with rising household incomes, now seen in parts of Africa, are likely to see rapid expansion. But this growth is not without challenges, which include competition from IPTV.
     "IPTV is taking some satellite customers [away] since IPTV providers tend to have bundled offers that include broadband, which can be less expensive than satellite pay-TV offers," she said.
     And in the U.S. markets, Robert Mercer, who serves as DIRECTV's senior director of public relations, said his company faces several challenges too, including ongoing economic headwinds, higher levels of competitive intensity and rising programming costs that threaten to make services unaffordable to the average TV viewer. But Mercer remains optimistic and said these challenges are not insurmountable. “We are confident we can meet any challenge we face in the marketplace," he said noting that innovation is key.

"In order to maintain our momentum, we have to further our innovative excellence to enhance and advance the entertainment experience,” Mercer said.
      Abraham also noted that while mature markets show flat subscriber growth, emerging markets are still serving as a boon to the industry, while still heavily focused on subscriber growth. "Providers are adding additional services to continue growing revenue and to improve the value of those services for the subscriber," Abraham said. She also noted that the trend will be offset in a few years as providers turn their attention to average revenue-per-user growth.

     Traditional pay-TV providers will also use over-the-top content (OTT) delivery to expand the reach of their services beyond their traditional networks, she added. "They are making OTT work for them, while others are competing against OTT providers and may lose customers to them," Abraham said.
     The MRG report examines the current state of the worldwide pay-TV subscriber market and provides subscriber data for the top 100 satellite operators, 60 cable providers and 140 IPTV pay-TV operators. Subscriber data is also broken down by country, geographic region and by platform.
     Overall, the Asia-Pacific region fueled most of the subscriber growth in 2012, as 40 million new households in the region signed up for pay-TV services. To date, there are more than 445 million total pay-TV households in the Asia-Pacific region. In contrast to Asia’s growth, pay-TV subscriber households in North America remained stagnant last year, finishing at just under 113 million.
     In the United States, Joseph Widoff, executive director of the Satellite Broadcasting & Communications Association, said he remains bullish on the growth of satellite video and broadband service in the United States. “As far as the U.S. market is concerned, satellite TV providers continue to experience growth even in the first quarter of this year, while other pay-TV providers are struggling,” Widoff said.
     He also noted that satellite’s broadband services will provide end-users in "underserved" markets with the opportunity to benefit from faster speeds and more robust services.
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