Emerging markets drive satellite pay-TV growth

Nearly 100% of subscription & revenue growth by 2023 from non-mature markets

PARIS, MONTREAL, WASHINGTON D.C. — According to Euroconsult’s newly released report, Satellite Pay-TV: Key Economics & Prospects, the global satellite pay-TV industry has observed strong growth in the past five years despite an increasingly competitive TV landscape where IPTV, DTT and connected entertainment services have rapidly expanded their reach. Subscriptions to satellite pay-TV reached 196 million homes in 2013 and revenues topped $97 billion. While key performance indicators of the sector continued to grow, a slight slowdown was observed, largely attributable to the lack of dynamism in mature markets. Emerging markets now account for 60% of global subscribers, as well as nearly 100% of subscription growth.

In the past five years, emerging markets have been the most active in rolling out new platforms, increasing subscriber bases, growing revenues and adding TV channels. They have also reduced the technical gap with mature markets’ platforms in terms of value-added services rolled out. “Emerging markets are home to over 80% of the nearly 160 active platforms,” said Dimitri Buchs, Consultant at Euroconsult and editor of the report. “Over 95% of platforms launched in the past three years operate in these markets.” The share of revenues coming from emerging markets is lower due to the large availability of low-cost services in these countries, but it has also increased in recent years, from 15% in 2008 to 26% in 2013.

Apart from new platform launches, a growing trend in emerging markets has been the expansion into new markets for existing players; this has been particularly true in Sub-Saharan Africa and Latin America. The launch of 60 platforms in the past five years has led to an oversupply in certain emerging markets including Indonesia which had the highest number of active players in November 2014. Several large, fast-growing satellite pay-TV markets – Russia & Brazil – began to consolidate in 2014 following a slowdown in growth over the last several years. Despite this recent M&A acceleration, new projects should continue to rollout in the short term, mainly in the fastest-growing markets. Future projects should also target new markets, with Bangladesh expected to be one of the next satellite pay-TV countries.

Given the progressive change in video offers and the rapidly evolving pay-TV landscape, the recently observed trend should continue, with several of the largest mature markets including the U.S., France and Japan expected to see a contraction in satellite subscribers, revenues and number of TV channels broadcast. In mature and advanced emerging markets, the competitive environment will increasingly lead to an adaptation of business models and service offerings. Satellite pay-TV platforms will increasingly expand their ecosystems to become cross-media platforms by rolling out TV Everywhere and OTT services in parallel to their linear TV offerings, enabling them to maintain a strong foothold in their national/regional markets. Decreasing satellite KPIs will push a growing number of platforms to find new sources of revenue and expand their reach outside their satellite subscriber base. This has already begun with several satellite pay-TV platforms rolling out standalone OTT services available to households not subscribing to their linear packages.

Emerging markets should account for nearly 100% of growth in subscriptions, revenues and number of TV channels by 2023. Global subscriptions should reach 340 million in 2023; emerging markets should account for nearly 80% of the total, with Asia and Sub-Saharan Africa expected to be the fastest-growing regions. Subscriptions will be largely supported by the greater availability of low-cost offerings. Nearly 30,000 channels should be distributed in 2023, with growth favored by the take-off of HD in emerging markets and rollout of the 1st UHD channels.