Global pay-TV revenue, which peaked in 2016 at $202 billion, will drop to $150 billion, or by 26%, within five years, projects Digital TV Research.
That’s the same research firm that, based on its reanalysis of data for 138 countries in the light of COVID-19’s impacts, now projects that OTT revenue will rise 101%, to $167 billion over the same 2019 to 2025 period. That includes 120% growth for ad-supported VOD, to $53.5 billion, and 103% growth for subscription-driven SVOD, to $97.5 billion.
The drop in pay-TV revenue is expected despite an increase in total global pay-TV subscribers of 35 million or 3.4% over that period, from 717 million to 1.06 billion.
Much of the revenue loss will result from subscribers converting from standalone TV to bundles in which they pay more overall to the operator but less on TV services, explained the firm’s principal analyst, Simon Murray. “Cord-cutting is also a major problem, especially in the U.S.,” he added.
Indeed, of the 61 countries expected to see pay-TV revenue declines, the U.S.’s projected loss is the most dramatic: down $31 billion, or 35%, to $57.4 billion. Canada and Brazil are each projected to lose about $1 billion.
The biggest exception will be India — projected to gain $812 million, or nearly 17%, to hit nearly $6 billion. China’s growth is estimated at $133 million, or 1.3%, bringing it to more than $10 billion.
The top five countries will generate 56% of global pay-TV revenues, and the next 15 countries will generate 25% of the total, by 2025 — meaning that the top 20 will account for 81% of the total by 2025.
Looking at subscriber trends, the researcher now projects that global SVOD subscriptions will increase by 519 million, or 81%, to 1.16 billion over the five-year period. The total will jump by 170 million in 2020 alone.
The SVOD landscape will be heavily dominated by five global platforms, with combined paying subscribers totaling 640 million by 2025.
Disney+ is projected to achieve the greatest growth, adding 176 million subscribers to hit 202 million by 2025. But Netflix will remain the global leader, adding 91 million subscribers, despite its maturity and already impressive reach, to reach 258 million by 2025.
Amazon Prime Video is expected to grow to 141 million, but the HBO and Apple TV+ brands to just 25 million and 14 million, respectively.
China’s domestic players (no foreign platforms are expected to penetrate the country) will account for 23% of the global total by 2025.
Source: Digital TV Research
In the pay TV arena, combined subscribers (households) for the various types of digital pay-TV will continue to see strong growth. Digital TV subscribers shot up from 380 million in 2010 to 990 million at year-end 2019, and are projected to hit 1.06 million by 2025.
IPTV will see the largest growth, adding 84 million subscribers to reach 391 million, and upping its pay-TV subscriber share from 30% to 37%, between 2019 and 2025. However, its share of revenues is projected to be flat, ending 2025 at $27 billion.
Satellite TV will lose 4 million subscribers in the same period, and see its share of total pay-TV subscribers decline from 21% to 20%. Satellite revenues will decline by $18 billion, including a $14 billion drop in the U.S. alone.
Meanwhile, cable TV subscribers will continue to drop. Combined digital and analog subscribers dropped 9%, from 530 million in 2010 to 484 million in 2019, and are projected to fall by another 11% to 430 million by 2025. By that time, analog cable will account for just 1 million subscribers, versus 429 million for digital cable.
Cable’s share of total pay-TV subscribers will have dropped to 47% by 2025 — a massive decline from its 74% share in 2010.
Total global cable TV revenues (digital and analog) peaked at $97 billion in 2012, and are projected to drop to $63 billion by 2025.
Digital TV Research's forecasts assume that professional sports will restart in August following relaxations in the COVID-19 lock-down. If that doesn't happen, pay TV will experience even more considerable churn, noted Murray.
Source: Digital TV Research