One third of Europe’s pay-TV operators to shrink by 2017

Changing of the guard

Changing of the guard at Windsor Castle (copyright Chris N Illingworth)

There is a changing of the guard underway in Europe, with around a third of the continent’s pay-TV providers set to lose subscribers by 2017 due to the rise of alternative platforms such as IPTV, according to a new report from UK firm Digital TV Research.

Pay-TV subscriptions for the 95 operators across 25 countries covered in the new report are however expected to increase – from a collective 96.2mn in 2007 to 140.9 million by 2017.

Simon Murray, Principal Analyst at Digital TV Research, said: “Despite losing TV subscribers, UPC/Liberty Global will remain Europe’s largest pay TV operation by some distance. Germany’s Unitymedia will lead the way for Liberty Global.”

Murray continued: “UPC/Liberty Global will not be the only operator to experience falling TV subscriber numbers between 2011 and 2017. In fact, this will happen for 31 of the 95 operators covered in this report – or a third of the total.

“Subscriber numbers will fall for various reasons, the most common of which is increased competition. Traditional pay TV operators now face greater rivalry than ever before – either from other pay TV platforms such as IPTV or satellite or from “free” multichannel TV services such as DTT and online TV and video.”

Declining subscriber numbers are expected to affect cable operators more than other operators, with many of Europe’s established players having the legacy of a large analogue subscriber base.

Although most of these homes are expected to convert to digital packages from the same operator, some will be tempted to migrate to other platforms. This is especially true of the ‘refuseniks’, who do not want to pay any more for TV services and may be most attracted to free-to-air DTT.

Top 5 European pay-TV operators by subscribers

Liberty Global/UPC stays top in terms of subs

BSkyB, a provider of DTH and OTT services in the UK and Ireland, will drop from second to third in the subscriber ranking, although its subscriber count will increase between 2011 and 2017, according to the latest forecasts.

Russia’s Tricolor will move up from fourth in 2011 to second place in 2017 by adding nearly 5mn subscribers. The low-cost DTH player also has many “subscribers”, which do not pay to receive the service and have therefore not been included in this report.

Total subscription and VOD revenues for the 95 operators increased from US$ 26bn in 2007 to US$ 33.7bn in 2011. However, the total will only reach US$ 35.4bn by 2017.

Subscription and VOD revenues are expected to fall for 35 of the 95 operators (37%) covered in this report between 2011 and 2017. These revenues are for subscriptions and VOD only, and therefore do not include other revenues such as broadband, telephony, advertising, equipment sales and rental etcetera.

Top 5 European pay-TV operators by revenues

BSkyB will retain its dominance in terms of revenues

These revenues will fall (or at least slow in growth) for numerous reasons, including greater competition, which will see operators reduce package prices (and often the number of channels on offer) to retain existing subscribers and/or attract new subscribers.

Another major factor is operators’ growing efforts to convert their subscribers to triple-play and double-play bundles, which are more lucrative to them overall than standalone TV subs but mean lower TV ARPUs (average revenue per user).

BSkyB will remain at the top of the revenues league table, recording US$ 7.2bn subscription and VOD revenues by 2017. UPC will stay in second place, although still someway behind.

Liberty Global/UPC is set to officially launch its much-anticipated new home gateway ‘Horizon’ in just a few days’ time at the IBC trade show due to kick off in Amsterdam tomorrow.

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