March 12, 2018
Domestic pay-TV revenue is projected to decline $26 billion (26%) to $75 billion from a peak of $101.7 billion in 2015, according to new data from Digital TV Research.
Cable TV revenue will fall to $36.7 billion from a peak of $54.1 billion in 2010 at $54.1 billion. Cable will lose nearly 12 million subscribers, although most of the losses have already taken place.
“Satellite TV and [IPTV/telecom] are also losing subs and revenue,” Simon Murray, principal analyst at Digital TV Research, said in a statement. “Much of this is due to the operators shifting their subscribers to online platforms. However, growth from virtual MVPDs is not expected to make up completely for the subscriber and revenue shortfalls from traditional pay TV.”
The report suggests telecom sub losses are mainly due to AT&T encouraging U-Verse subs to convert to DirecTV. This is the reverse of what has happened in most other countries. Telecom revenue spiked in 2015 at $9.6 billion and will fall to $4.7 billion in 2023. The number of telecom subs topped 12 million in 2014, declining to 6.2 million in 2023.
Satellite TV revenue will decline (16%) from $39.7 billion in 2017 to $33.6 billion in 2023. Satellite TV subs will drop by 4 million from the end of 2017 to 2023 – down 3 million in 2017 alone. Dish is pushing its Sling TV platform, with DirecTV Now also making an impact.
The number of domestic traditional pay TV subs will fall from 100.3 million in 2012 to 80.3 million in 2023. Pay TV penetration will fall from 87.6% of TV households in apex year 2013 to 66.7% in 2023.
Although Canada is losing pay TV subs, its problems are not as severe as the United States. Pay TV penetration reached a highpoint in 2013 at 85.1%. The level will fall to 74.8% by 2023. However, the number of pay TV subs will be 11.2 million by 2023 – about the same as 2017. Pay TV revenue will fall from a peak of $6.8 billion in 2015 to $6 billion by 2023.