S&P: 2023 Could be Tipping Point for Pay TV

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NEW YORK—Broadband subscriptions worldwide are expected to hit 1.13 billion by 2023, exceeding the 1.09 billion traditional pay TV subscribers for the first time, according to a report from S&P Global Market Intelligence report.

The newly published "2023 Technology, Media and Telecommunications (TMT) Industry Outlook," part of S&P Global Market Intelligence’s Big Picture 2023 Outlook Report Series, focuses on the market future of the metaverse in gaming and the enterprise, datacenter sustainability amid a worsening energy crisis, and the rise of fintech as a service. The report also explores video streaming competition and broadband transformation as forces of disruption in 2023.

The fact that broadband subscriptions will exceed pay-TV subscriptions has wide implications for the future of media, S&P says, which notes that gaming technology will be the driving force behind the metaverse’s evolution in the near term as augmented reality (AR) and virtual reality (VR) hardware enables users to engage in virtual worlds in and outside of work. 

AR and VR device adoption will grow steadily over the next five years as big tech companies underline the hardware's potential as a conduit to the metaverse, S&P said. As of the end of 2021, the researcher estimates there were 28.5 million AR/VR headsets installed worldwide across consumer and commercial settings, and forecasts that base to grow to 73.6 million by 2026.

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"The foundational shift of the global economy to a digital footing—a shift that has been underway for over a decade and accelerated during the pandemic—continues. This is creating enormous opportunities for new value creation and disruption,” said Eric Hanselman, Chief Research Analyst for TMT at S&P Global Market Intelligence.

For traditional TV, rising inflation and cost of living crises may force some consumers to pare back streaming subscriptions, which in turn could prompt the pack chasing Netflix and Disney to focus on profitability instead of scale, S&P said. By 2030, the researcher predicted that global pay TV penetration will fall to 51.2% of residential households, from 57.7% in 2021.

Tom has covered the broadcast technology market for the past 25 years, including three years handling member communications for the National Association of Broadcasters followed by a year as editor of Video Technology News and DTV Business executive newsletters for Phillips Publishing. In 1999 he launched digitalbroadcasting.com for internet B2B portal Verticalnet. He is also a charter member of the CTA's Academy of Digital TV Pioneers. Since 2001, he has been editor-in-chief of TV Tech (www.tvtech.com), the leading source of news and information on broadcast and related media technology and is a frequent contributor and moderator to the brand’s Tech Leadership events.