Pay-TV Subscribers Worldwide Will Continue to Grow in 2009

CAMBRIDGE, Mass. — Pay-TV subscribers are expected to grow by 8 percent in 2009 to reach nearly 733 million worldwide despite the challenging economic environment, according to the first quarter update of the Media Forecast from Pyramid Research, the telecom research arm of the Light Reading Communications Network.

Pyramid Research’s Media Forecasts are designed to provide competitive intelligence on the pay-TV and mobile TV dynamics for 52 countries, as well as regionally and globally. The Media Forecasts track demands patterns for free and pay-TV services over terrestrial, satellite, and mobile platforms worldwide, providing market share information at both the technology and operator levels, as well as five-year adoption and revenue projections.

Considering the current estimates of a 6 percent decline in global nominal GDP in 2009, the adoption levels for pay-TV services will undoubtedly hit a speed bump worldwide, with year-over-year growth rate declining to 8 percent from 11 percent in 2008, notes Ozgur Aytar, research manager at Pyramid Research. Lower double-digit growth rates expected across the emerging regions coupled with the stabilizing effect of multiplay bundles and their increasing penetration particularly in mature pay-TV markets should, however, prevent the global subscriber base to take a nose dive. “We started the year with a great sense of uncertainty of the impact of the economic downturn on the pay-TV market, and while much uncertainty remains, pay-TV operators’ first-quarter results published to date have not been so bad after all. Most continue to add subscribers, and those that are losing customers are doing so largely as a result of the entry of new competitors,” says Aytar.

“The more significant impact of the recession will be felt in customer spending on pay-TV services in 2009, as operators have increasingly been rolling out lower, “economy” pay-TV and multiplay bundle tariffs to respond to mounting customer demand for less expensive services and to retain subscribers,” explains Aytar. “By our estimates, average expenditure per pay-TV household will decrease by 6 percent in 2009 worldwide and by as much as 20 percent in some of the emerging markets,” she adds.

Cable TV operators are expected to generate more than half of the global pay-TV revenue in 2009. The prospects for IPTV platforms appear to be most promising across the Western European markets, where IPTV subscribers are projected to account for 15 percent of total pay-TV base by year-end. Elsewhere, IPTV’s share of subscribers will remain less than 5 percent of the total market. “The slowdown in the global economy has hit both capex and the speed of broadband network deployments in emerging markets. In order to manage through the perfect storm, operators are scaling back their capex by as much as 20 to 30 percent, and most are holding back on expansion plans but rather focusing on increasing operational leverage in existing markets, which in return is negatively affecting the availability of IPTV services” says Aytar.