‘Pay TV’ Holding Its Own Against OTT Growth

0

Despite increased competition from OTT video services, the worldwide pay TV market has been growing at a steady pace.


That’s according to a recently conducted study from Oyster Bay, N.Y.-based ABI Research. ABI finds that the global pay TV market — including satellite, cable and IPTV services —is expected to generate $295 million in 2022.

But, is the U.S. different than the rest of the world?

Competition from OTT services is significant in developed markets, where the pay TV market is mature. In North America, traditional pay TV services lost more than 3 million subscribers in 2017 mainly due to customers switching from satellite, cable, or IPTV services to video streaming services. “OTT is becoming a preferred video viewing platform due to its low-cost and availability on multiple devices without a long-term contract requirement,” notes ABI Industry Analyst Khin Sandi Lynn.

Pay TV operators are reacting to the trend by adding OTT services to their platform. DirecTV NOW and Dish Network’s Sling are two examples of video streaming services provided by pay TV operators. Such services can be accessed through video streaming adapters or mobile devices and provide so-called “skinny bundles”, which are usually low-cost packages with an option to add channels at an extra cost.

Similarly, pay TV operators are starting to deploy Android-based boxes to provide OTT service together with traditional TV platforms. Swedish cable operator Com Hem recently launched Android-based TV Hub, which allows subscribers to access linear TV channels and streaming services. Android-based set-top boxes are a good option for pay TV operators to compete with OTT service providers while maintaining customer loyalty.

Regionally, the pay TV market in the Asia-Pacific has grown more than other regions, reaching a total subscriber base of 656 million in 2017, a 7% year-over-year increase. The pay TV market is expected to grow at a higher rate in the developing markets in the years to come, while mature markets such as North America and Europe are likely to see a slight decline or sluggish growth.

“Pay TV and OTT offerings can vary dramatically between regions and between countries in terms of content availability and price,” Lynn said. “OTT adoption in mature markets will impact pay TV adoption there, but the more reliable delivery and all-in-one nature of pay TV will prove valuable in those developing markets.”

The findings are from ABI Research’s Pay TV Subscribers report, part of the company’s Video, VR & OTT research service, which includes research, data and Executive Foresights.