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IPTV to account for 18% of Western Europe's pay-TV homes by 2014

29.10.10


The television sector in Western Europe is in a state of considerable flux at the moment, according to a new report from Informa Telecoms & Media (publisher of IPTV News), as analogue terrestrial TV is expected to become extinct in the region in 2013 and IPTV will continue to gain subscribers over the next five years.

In 2006, analogue terrestrial TV was the primary TV service in 52mn TV homes across Western Europe, making it the leading platform, according to the report. In 2007 however, cable overtook it with 51mn homes by the end of the year. Cable TV was subsequently overtaken itself by digital terrestrial TV in 2009 with 51.9mn homes - giving it a 31% penetration of the region's TV homes.

Cable is still "comfortably" the biggest pay-TV platform in Western Europe, according to the report, but its dominance is believed to be on the wane: in 2000 cable TV accounted for 77% of pay-TV subscribers, but by the end of 2009 this had fallen to 54%, and is forecast to fall further to 43% by the end of 2015.

DTH was the big beneficiary initially of this fall in cable TV's share, taking 23% of pay-TV subscribers in 2000, rising to 28% in 2009, but forecast to slip to 27% by 2015. Pay DTH growth beyond 2009 is predicted to be limited by the rise of IPTV, which accounted for 9% of pay-TV homes in 2009, but is forecast to double this share to 18% by the end of 2015 - potentially challenging DTH for second place shortly after the forecast period, according to Informa Telecoms & Media.

Traditional pay-TV services are described as coming under pressure from several directions: free and low-cost options are forcing premium pay-TV services to justify their subscription prices, leading to an increasing reliance on technology innovations such as HDTV, VOD, DVRs and 3DTV to "prove" their added value. The economic downturn is also believed to have presented a further challenge for pay-TV, as it bids for diminishing consumer spending power against a range of alternative entertainment options.

There is believed to be little evidence still that over-the-top (OTT) TV services are taking significant numbers away from pay-TV, but as OTT improves its offering, pay-TV operators are believed to be "sensibly" adapting to changing consumer tastes with new initiatives such as multi-screen strategies.

Most countries in Western Europe are believed to be making good progress in their analogue-to-digital conversion: digital DTT is predicted to be the primary TV services in 37% of TV households by the end of 2015, while digital cable and DTH will take 21% and 17% respectively. IPTV is expected to be the primary TV service in 11% of the region's TV households by the end of 2015, while free-to-air digital satellite will take 9%.

Western Europe digital TV households numbers are expected to record 42% growth between 2009 and 2015, having passed the 100mn subscribers milestone in 2008, and is expected to pass 150mn sometime in 2012. Pay-TV revenues are expected to exceed US$ 30bn in 2010, but growth thereafter will be limited, according to the report, as the value of pay-TV is affected by an increasing reliance on multi-play bundles.

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IPTV to account for 18% of Western Europe's pay-TV homes by 2014


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