One third of Europe’s leading 95 pay TV operators will lose revenue between 2011 and 2017 through increasing competition from alternative IPTV and OTT providers, but there will be little changing of the guard at the top. The report from Digital Research in the UK does however predict a continuation of Europe’s steady increase in subscriber numbers, from 96.2 million in 2007 to 140.9 million by 2017. The main impact of the increased competition is likely to be a decline in ARPU, squeezing profit margins. But the growing contrast between revenue and subscriber numbers also reflects the anticipated growth of Russia’s low-cost pay TV services. This will dilute total revenues while increasing customer numbers, with Russia’s biggest satellite operator, Tricolor, predicted to rise from fourth to second place in terms of subscribers, rising from 6.9 million in 2011 to 11.7 million in 2017. Liberty Global, the pan European cable operator under the UPC brand in most countries, but owning Unity Media in Germany, will stay number one despite slipping from 15.1 million customers in 2011 to 14.5 million in 2017. These figures though are based on the assumption that Liberty Global will make no further acquisitions in Europe during that time, which is questionable given its recent activity.
The UK’s leading pay TV operator, BSkyB, will slip from second to third place in Europe’s pay TV league despite gaining subs from 10.4 million in 2011 to 11.7 million in 2017. There is also a hint that Germany’s recent surge in pay TV subs may come to an end, being perhaps an aberration resulting largely from the decline of a historical reluctance by its population to spend anything on TV. At any rate, the report predicts that cable operator Kabel Deutschland will slip from 8.4 million to 8.0 million subs over the forecast period, coming down from third place in 2011 to fourth by 2017.
The report highlights the big difference between the league tables for revenues and subs. For revenues, BSkyB is the runaway European pay TV leader taking $6.7 billion in 2011 and is expected to slightly increase its stranglehold by 2017 when it will earn $7.2 billion. This will increase the gap on Liberty Global, which will stay at number two for revenue but with less than half BSkyB’s total, predicted to fall slightly from $3.3 billion in 2011 to $3.1 billion in 2017. BSkyB’s high revenues are founded on the large subscriptions it can charge for watching its sports channels fuelled by English Premier League football rights.
Italy is also football mad, leading Digital Research to predict that Sky Italia will rise from fourth to third place in Europe’s pay TV revenue table despite the country’s financial problems, with revenues increasing from $2.6 billion in 2011 to $2.7 billion in 2017. This will be at the expense of France’s CanalSat, predicted to fall from third to fourth as revenues decline from $2.9 billion to $2.5 billion.
Germany’s Kabel Deutschland is predicted to jog along in fifth place for revenues, staying at around $1.6 billion over the forecast period. Russia’s Tricom, despite being in second place for subs, will still be well down the table for revenues.