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Global pay-TV subs to grow 5% this year, despite cord-cutting in US

The worldwide pay-TV market will continue to grow this year despite a decline in North America as consumers migrate to over-the-top (OTT) services, according to a new report from ABI Research.

The number of pay-TV subscribers globally is predicted to reach 858.1mn by the end of this year, up 5% from December 2011, with growth to be driven mainly by Asia-Pacific, which is expected to add more than 27mn subscribers in 2012.

Cable TV operators in the US are believed to be facing a continuous decline in pay-TV subscribers: in the first two quarters of 2012, they lost nearly 0.8mn subscribers, although their broadband subscriber base has continued to grow.

IPTV, which has less penetration than cable or satellite in the US market, gained around 0.6mn subscribers during the same period.

“As broadband adoption grows, it is likely that pay-TV subscribers are switching to Internet TV services,” said Sam Rosen, practice director of TV & video.

“Internet TV services are cheaper than traditional pay-TV services or even free of charge. Services such as Netflix, Hulu, YouTube, etc. are cheaper alternatives for pay-TV subscribers especially in these uncertain economic times.”

ABI Research is now predicting that the overall pay-TV subscriber base in North America will decline 0.2% between the end of 2011 and the end of 2012.

The Asia-Pacific region is expected to see the strongest growth in digital TV subscriptions in 2012, thanks partly to the on-going digitisation process in countries such as India, which has been steadily increasing digital TV penetration – although ABI Research adds that progress could be better.

The Indian government recently announced that it will not extend the deadline set for cable digitisation of 12mn homes in the four major metro areas beyond October 31, 2012.

However, ABI Research is skeptical that this target will be reached (a position shared by IHS), as only 68% has been achieved so far.

“Overall Asia-Pacific digital cable TV subscriber base is expected to reach 213 million by the end of 2012, a 27% increase from 2011,” notes Khin Sandi Lynn, research analyst at ABI Research.

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