New TV services gain ground

02 February 2011

LONDON: A new generation of digital and web-enabled television services will pose a significant challenge to cable TV over the next five years, a study has argued.

Research firm Ovum estimated cable TV would reach 573m households worldwide in 2015, after registering a compound annual growth rate of 3%.

Cable should also retain its dominant position in the US despite posting a drop from 60m American homes in 2010 to 54m in 2015, as alternatives boasting internet connections gain further ground.

Jonathan Doran, an analyst at Ovum, reported that its number of US users had already declined by 4m between 2007 and 2010, reflecting both short term factors and a broader structural shift.

"This trend towards cancelling subscriptions, or 'cord cutting', has arisen due to a combination of the economic downturn and the growing availability of attractive low-cost or free digital terrestrial and internet-based options," he said.

"It's not just cord-cutting, however. Some cable customers will also defect to more innovative and better value IPTV and satellite pay-TV options."

Elsewhere, satellite television is set for a 10% expansion every 12 months, taking its penetration to 419m households globally.

"Satellite pay-TV will remain stable in the face of competition from emerging low-cost services as it continues to attract a core of higher-value subscribers than cable," said Doran.

Internet protocol television - or IPTV - should see uptake climb 24% a year across the same period, giving this medium a presence in 109m residences.

These figures stood at 18% and 211m respectively concerning digital terrestrial television, according to Ovum.

Overall, pay-TV revenues are anticipated to log an increase nearing 40% by 2015, although individual markets may witness severely contrasting trends.

Data sourced from Ovum; additional content by Warc staff