Pay-TV providers embrace OTT video

The global pay-TV services market, including cable TV, satellite TV, telco TV and OTT video, totaled $237 billion in 2014, up 7% from the previous year, according to the 2015 IHS Infonetics Pay-TV Services and Subscribers report from IHS.

OTT pay TV_chartIn a growing number of pay TV markets, service providers are expanding market presence by offering their own OTT video services, primarily as apps on tablets and third-party OTT media servers. Dish Networks, the second-largest satellite provider in the US, is offering an OTT video service called Sling TV that’s aimed squarely at cord-cutters and cord-nevers,” said Jeff Heynen, research director for broadband access and pay-TV at IHS.

“The net result of these offerings will be slower revenue growth globally as OTT services carry a lower ARPU.”

“Pay-TV providers are also actively marketing ‘skinny’ bundles of 10 to 30 channels in more affordable packages. Verizon has gone so far as to introduce multiple bundles of channels that subscribers can add on top of their base channels to create a custom channel lineup,” Heynen said.

Global pay-TV subscribers ballooned to nearly 800 million in 2014 (up 5%); for the first time, the OTT pay-TV segment provided the strongest growth.

Over the five years from 2014 to 2019, OTT pay-TV services are forecast by IHS to have the highest compound annual growth rate (CAGR) of any pay TV service.

Cable pay-TV revenue growth slowed to 1.8% in 2014, largely due to sluggish subscriber growth in North America, where net video subscribers are declining around 1 to 3% annually.

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