Traditional pay-TV revenue is forecast to decrease dramatically over the next few years, with average annual growth dropping to 2.8% between 2014 and 2018, compared to 6.1% between 2010 and 2013. Despite which, it will continue to be the main source of TV revenue up to 2018 — bringing in 195.9 billion EUR in 2018.
Globally, pay television set-top box (STB) revenue — including IP, cable, satellite, and DTT STBs and OTT media servers — is up 4 percent in 2Q14 from 1Q14, to $4.8 billion. STB unit shipments grew 7 percent sequentially in 2Q14, but are down 3 percent from the year-ago 2nd quarter (2Q13). Cable television STB revenue increased by 3 percent sequentially in 2Q14, and unit shipments grew 4 percent during this same period.
A new market study finds that 84% of American households subscribe to some form of pay-TV service. While the reported number of pay-TV subscribers has been fairly flat over the past four years, occupied housing in the U.S. market has grown. Consequently, penetration of pay-TV among residential households has waned from its peak in 2010 following the digital TV transition. Among TV households that do not currently subscribe to a pay-TV service, only 6% plan to subscribe.
Pay-TV in North America has been on a roller coaster ride during 2013 and into the first half of 2014. In the second half of 2013, and continuing into the first quarter of 2014, total tracked subscriptions in the U.S. increased at a modest rate. In the second quarter of 2014 the trend reversed, with total tracked subscriptions declining by 276,000. Digital subscriptions have continued to increase as cable operators move forward on transitions and IPTV vendors have continued to grow their subscriber bases.
U.S. market digital subscriptions increased by 239,000 during the second quarter, moving past 93 million total.
Since the end of the depression in 2009 typical U.S. family income has fallen 6% in real terms. During the same period the amount paid by consumers for pay-TV has increased in price between 12%-20%, and programming costs much more than that.
Under these conditions an economic cord cutting increase looks to be inevitable.
The Multiscreen Index, published by informitv, shows a 1.4% increase in digital television subscriber numbers across 100 leading pay-television services around the world in the first quarter of 2014.
Providers collectively gained 4.17 million video customers over three months and 17.43 million year on year, an increase of 5.2%.
Worldwide set-top box (STB) revenue totaled $4.8 billion in 1Q1 — that’s a decline of 3% from 4Q13. Cable STBs were the only segment to see unit and revenue growth in 1Q14, each up 5%. North America today commands the largest portion of STB revenue, but Asia Pacific is projected to close to within 3 percentage points by 2018.
A boost in overall STB unit shipments this year will come from an increase in over-the-top media servers as service providers in China and other emerging markets use these devices.