Despite the competition from OTT video services, the worldwide pay TV market has been growing at a steady pace. According to ABI Research, the global pay TV market — including satellite, cable, and IPTV services — is expected to generate $295 million in 2022.
Competition from OTT services is significant in developed markets where the pay TV market is mature. For example, in North America, traditional pay TV services lost more than 3 million subscribers in 2017, mainly due to customers switching from satellite, cable, or IPTV services to video streaming services.
ABI’s Khin Sandi Lynn commented:
“OTT is becoming a preferred video viewing platform due to its low-cost and availability on multiple devices without a long-term contract requirement”.
Pay TV operators are smartly reacting to the trend by adding OTT services to their platform. DirecTV Now and Dish Network’s Sling are two examples of video streaming services provided by pay TV operators. Such services can be accessed through video streaming adaptors or mobile devices and provide so-called “skinny bundles”, which are usually low-cost packages with an option to add channels at an extra cost.
Similarly, pay TV operators are starting to deploy Android-based boxes to provide OTT services with traditional TV platforms. Swedish cable operator Com Hem recently launched TV Hub, which allows subscribers to access linear TV channels and streaming services. Android-based STBs are a good option for pay TV operators to compete with OTT service providers while maintaining customer loyalty.
Regionally, the pay TV market in Asia/Pacific has grown more than other regions, reaching a total subscriber base of 656 million in 2017, a 7% year-on-year increase. The pay TV market is expected to grow at a higher rate in the developing markets in the years to come, while mature markets such as North America and Europe are likely to see a slight decline or sluggish growth. Lynn concluded:
“Pay TV and OTT offerings can vary dramatically between regions and countries in terms of content availability and price. OTT adoption in mature markets will impact pay TV adoption there but the more reliable delivery and all-in-one nature of pay TV will prove valuable in those developing markets”.
