IPTV to capture 15% of global pay-TV market by 2015

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Cable TV operators around the world are seeing increased competition from satellite, IPTV and OTT TV services which are leveraging attractive pricing and features, according to a new report from Infonetics Research.

“In 2008, cable video made up 59% of the global pay-TV market, satellite video brought in 38% and IPTV was just a drop in the bucket,” said Jeff Heynen, directing analyst for broadband access and video at Infonetics Research. “Now cable operators are being challenged not only by attractive pricing and services from IPTV and satellite operators, but by all over-the-top (OTT) video services, like Netflix and Amazon On-Demand, and by connected-TV devices, which are prompting consumers to cut the cord.”

Net new cable video subscribers are continuing to decline in North America and the EMEA region, and the small increases in Asia and Central and Latin America (CALA) are not managing to offset them, the report adds.

“While we don’t expect OTT to have a significant impact on pay-TV subscribers because operators are responding to OTT with their own enhanced delivery offerings, we do expect cable video’s share of pay-TV revenue to decline as satellite video increases – nearly catching up to cable by 2015 – while IPTV services grow to 15% of the market,” stated Mr. Heynan.

The global pay-TV market, covering IPTV, cable and satellite video services, totalled US$ 125bn in the first half of this year, and will grow to US$ 353bn by 2015, according to the research firm.

Most of this growth is expected to come from satellite video and telco IPTV services. North America remains the highest-value pay-TV market, benefitting from the highest average revenue per user (ARPU), followed by Asia Pacific, which benefits from a pay-TV subscriber base nearly four times the size of North America’s.

US operators DirecTV and Comcast are identified as being the largest pay-TV providers in the world in terms of service revenue and subscribers respectively in the the first half of 2011, with DirecTV continuing to enjoy the highest ARPU in the industry, and Comcast now counting 22.5mn subscribers.

During the first half of this year, the top 20 pay-TV revenue leaders accounted for 52% of all pay-TV revenues, while the top 20 subscriber leaders represented just 29% of the subscribers, according to the report.

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