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Strategy Analytics: US pay-TV poised for 2014 rebound

The pay-TV market in the US has faced challenges for several years, which culminated in a 0.58% loss in total subscribers in 2013. However, recent research from Strategy Analytics forecasts a return to growth in 2014 at 0.14%, detailed in the Service Provider Strategies (SPS) service report, “North America Digital Television Forecast: 1Q 2014.”

IPTV will be the bright spot of the pay-TV market in the US. In 2013, IPTV subscriptions grew by 17.5% year-on-year and this trend will continue with a Compound Annual Growth Rate (CAGR) of 8.3% through 2019. IPTV service operators AT&T and Verizon are approaching the future with different strategies, but both are focused on driving advanced services and multiplay bundles with digital television and high-speed Internet at the core of their packages.

In the cable segment, Comcast has reversed a long-standing trend of subscriber losses, following the company’s rollout of its Xfinity X1 platform. Consolidation among US cable operators should enable faster digital transitions and a wider deployment of technology platforms. This trend will give customers better opportunities to access and consume content on multiple devices, when and where they want.

“Comcast has become a technology leader with its Xfinity X1 and X2 platforms as well as the RDK,” says Jason Blackwell, Director of the SPS service. “This is driving a global trend where operators with advanced gateways and services have seen subscriber growth, better customer retention, and higher average revenues per user.”

“The digital transition has been a double-edged sword for the cable industry: average revenues have risen, but higher prices have squeezed out some customers,” adds Eric Smith, Analyst in the Digital Consumer Practice. “We expect to see these customers return to Pay TV gradually, albeit with different packages or different services than those they left, and IPTV services in particular stand to gain the most.”

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