Cable and satellite TV will still account for 88 percent of pay-TV revenues by 2018, according to London-based analysis group Digital TV Research. This is only marginally down on the 91 percent level of 2013, and will be slightly up in absolute terms as the overall pie continues to grow. The company forecasts total pay-TV revenues rising by just more than10 percent — from $184 billion in 2013 to $203 billion in 2018.
There will be a change of order at the top, with DTH overtaking cable TV in revenue for the first time in 2013, both currently accounting for 45.9 percent of pay-TV revenues, or $84.45 billion. DTH revenues are predicted to reach $97 billion by 2018, 47.6 percent of the total, while cable slips to $82.6 billion. Even so, this is hardly the hemorrhage predicted by some analysts for cable TV operators. The forecast is based on the expectation that cable operators will be reasonably successful in combatting churn through multiscreen strategies that provide customers with TV Everywhere. They will be less successful though at mopping up new subscribers, especially in emerging markets, where DTH will reign supreme. In Brazil, for example, DTH revenues are expected to double over the 5-year forecast period, and increase even more by 135 percent in India, admittedly in the latter case from a very low ARPU base.
IPTV is predicted to remain the fastest-growing sector, with revenues expected to rise from $13.8 billion, or 7.5 percent of the total in 2013, to $21.5 billion or 10.5 percent in 2018. But this will still be dwarfed by cable and DTH. Strangely, OTT seems to be regarded as an offshoot of the other platforms. The only other contender, pay DTT, is expected to drop off the radar screen. It still accounts for around 9 million homes worldwide at present, but will dwindle almost to nothing by 2018, by which time DTT will be almost universally a FTA platform. Here it will gain some ground, having increased by 26 million households over the last year to reach 138 million now. It is likely that the combination of free-to-air DTT and OTT will still pose a threat to traditional pay TV, particularly among lower-end subscribers.