What’s driving growth in pay-TV are the emerging markets. Specifically, India and Latin America are adding satellite and cable subscribers, while China is seeing an increase in IPTV subscribers. Meanwhile, Comcast lost 355,000 American subscribers over four quarters.
The decline in cable subscribers across all operators is attributable more to churn than cord cutting as consumers defect to IPTV and satellite.
In a growing number of markets, pay-TV providers find themselves at a crossroads. Their traditional business models are under attack as telco IPTV providers, over-the-top (OTT) providers, and consumer electronics companies — i.e. Netflix, LOVEFiLM, Amazon, Hulu, Apple and Samsung — continue to divert revenue away from them.
For most pay-TV providers, the media tablet has become the de facto second screen: 47% of survey respondent operators support tablets as part of their multi-screen service now, growing to 89% by 2015.
More than 60% of broadband households have at least one television set connected to the Internet — such that it can receive entertainment services like Netflix and Pandora.
“Though broadband diffusion may be slowing as the market matures, the expansion of broadband-connected TVs continues at rapid clip, up 19% in the last year,” noted Michael Greeson.
In terms of the emerging types of DVR services, MRG is forecasting households with network DVR services to grow slightly faster than cloud DVR service households during the next five years. Global network DVR households will reach 19 million, with most activity occurring in North America, while cloud-based DVR households will reach 14 million.
MRG defines a network DVR service as “subscriber controlled,” meaning the DVR service end-user has the ability to select and record their own private copies of programming.
Backed originally by media and tech luminaries like billionaire Pierre Omidyar, Tim O’Reilly and Mitch Kapor, Federated Media launched in 2005 as a network for online ads and eventually raised just under $60 million over its lifetime, riding the wave of digital advertising to a reported $200 million valuation in 2008.
By 2014, its name and the heart of its traditional business was worth $22 million to a Texas-based television station operator and advertiser, LIN Media.
Sega has announced that they are establishing a transmedia sub-universe for the Sonic franchise which will span games, a TV show and a line of toys. Dubbed the Sonic Boom, Sega calls this a “new look” for the famed characters that make up the Sonic universe.
The Sonic Boom game will be exclusive to the Wii U and 3DS as part of an existing deal with Nintendo.
In 2014, movie producers worldwide will earn revenues of $29.6 billion from home video (DVD / Blu-ray) and all forms of TV licensing. They could earn the same amount by licensing all of their movies exclusively to online video entertainment companies — if 45% of the world’s broadband subscribers, or 348 million users, each pay $15 a month.
While 348 million users might seem like a huge number, it is less than half of the worldwide installed base of Pay-TV subscribers (cable TV, satellite TV and IPTV).
Total U.S. households that subscribe to HBO, Showtime, Starz and other premium TV channels declined by 6 percent over an 18-month span – from 38% in March 2012 to 32% in August 2013.
Over the same period, Netflix and other subscription services — including Hulu Plus and Amazon Prime — rose 4 percentage points, from 23% to 27%.
While this may not be a good year for pay-TV in the saturated markets within North America, there are still growth opportunities in other markets. Overall, this will be the year for global pay-TV subscriptions to pass the 1 billion mark — no later than in September, according to Pyramid Research.
The global pay-TV market will grow by 6% in terms of subscriptions during 2014, reaching a household penetration of 52 percent, and generate $237 billion in video entertainment service revenue.
via Pyramid Research
Video encoding systems can range from PCs with capture cards costing under $1,000 to 4:2:0 8-bit encoders with dual audio channels costing several thousand dollars to high end 4:2:2 10-bit 1080p (HD) encoders with 16 audio channels costing tens of thousands of dollars.
MRG says that this segment of the market will reach about $320 million — based on more than 20,000 units in 2017. By 2017 SD encoders will account for 13% of the market, compared to 35% in 2013.