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Pay TV still dominates US home entertainment market

Posted By TelecomTV One , 23 November 2012 | 1 Comments | (0)
Tags: OTT Video Broadcast cable US Research

Pay TV continues to dominate the US home entertainment industry, according to a new report. Guy Daniels reports.

A dominant 86 per cent of homes in the US pay a regular fee to receive linear TV channel broadcasts, with revenues rising 4.3 per cent in 2011 to reach $94bn, according to a new report from Futuresource Consulting. Carl Hibbert, head of broadcast, content and services, says that although this figure includes basic subscription packages, it’s the premium film and sport packages that figure heavily in the numbers. Hibbert says of the $32bn spent in the US on premium home entertainment – which includes VoD, electronic sell-through, pay TV and sell through and rental of packaged media - pay TV accounts for 40 per cent:

 

“Although the Netflix OTT TV service has been a major disruptive force, driven by high profile tie-ins with connected device manufacturers and streaming deals with studios, its direct impact on the pay TV industry has been minimal.

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The spectre of cord cutting predicted by many in the industry has not revealed itself in any great way and Futuresource forecasts indicate that it will not do so in the foreseeable future either, with less than 5 per cent of subscribers exiting in the next two to three years.”

 

Netflix has been criticised recently for having insufficient “blockbuster” content (it’s even worse in the UK, where the selection is woeful). Netflix blames the programme distributors for trying to charge too much – so much so that Netflix’s monthly subscription model wouldn’t be able to stand up. And the lack of these big-ticket new releases is why Netflix doesn’t let you search for individual titles…

 

Responding to the Internet threat, pay TV is now exploiting multiplatform and second screen opportunities with “TV everywhere” services, while also tentatively exploring OTT distribution into connected devices. According to the Hibbert, US consumers will continue to buy into pay TV subscriptions for the range of programming, the availability of premium content and the additional services:

 

“It’s true that cable operators have seen some decline in subscriber figures, though the majority has come from the low-end, which is associated with low ARPUs and higher tendencies to churn out. Many of those subscribers leaving cable have actually moved across to IPTV and satellite as opposed to leaving pay TV altogether. The most significant impact from online video services has been on the packaged media segment, which fell by $2.3bn in 2011.”

 

The report says Pay TV can compete with OTT and maintain its position, though OTT will also continue to expand despite rights issues and higher prices imposed by studios and premium aggregators. It concludes that growth in both paid-for and ad-funded OTT segments will culminate in the US online video market generating more than $12bn by 2016.

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(1) 26 November 2012 05:09:49 by Mark Callow

"TV Everywhere" is a joke. The vendors should be done for false advertising. Programmes are only available within the country and many of the programmes available on the cable system are not available on-line in the first place.