Pay TV Revenues to Drop $18B by 2023 as Spending Patterns Change
Taking a broad look at the 517 pay TV providers around the globe, Digital TV Research sees total revenues dropping by $18 billion from 2017 to 2023 when the market will be worth $183 billion. Two main patterns account for the drop: Subscribers in more developed countries are increasingly turning away from pay TV and toward streaming options, and if they stay with pay TV they're signing up for money-saving bundles.
Focusing on just the top ten largest pay TV providers, Digital TV Research sees a revenue drop of $20 billion. In 2017, the ten largest players accounted for 53 percent of the total revenue; in 2023 they'll account for 48 percent.
"Cord-cutting is a well reported problem in the U.S.," notes Simon Murray, principle analyst at Digital TV Research. "It is happening in some other countries too, but not that many. So there are fewer big spending subscribers in the U.S. and more low-spending subscribers in developing markets such as India and China."
As spending patterns change, 5 pay TV operators (including 4 from the U.S.) will lose over $1 billion in revenues from 2017 to 2023, while 15 operators will add over $100 million to their revenues in the same period.
"In developed countries, subscribers are paying less on TV services. This is partly due to cord-cutting but also because more homes are moving to bundles (where subscribers pay more overall but less on TV services)," Murray adds. "This shows how important the broadband connection has become for most homes."
With the rise of Facebook, Amazon, Netflix, and Google—and the shift from digital dinosaurs to digital natives—this is a time of great change. That's both exciting and frightening.
While pay TV is seeing big losses in the United States, it still has plenty of room to grow in other countries. IPTV adoption is strong in China.
It's a good news/bad news scenario for pay TV operators in Western Europe, according to Digital TV Research. Subscriptions are set to rise slightly, but revenues will be down $2.11 billion by 2023
Many households in Eastern Europe still get channels through analog pay TV, but that will largely be supplanted by digital in the next five years.