By Rich Nesin, General Manager and Resident Philosopher, HomePNA
First, according to research firm Ovum , cable will continue to lead the global multi-channel TV market over the next 5 years; growing at a compound annual growth rate (CAGR) of 3% to reach 573M households by 2015. The forecast includes hefty contributions from digital terrestrial TV (DTT) and satellite which they expect to grow at average annual rates of 18% and 10% respectively reaching 211M and 419M households. Interestingly, over the same period, PTV will grow at a CAGR of 24% to reach 109M households for 8% of the total market. Not bad growth for a sector that didn’t really exist a couple years ago.
In the US (as you might expect) cable will continue to lead however it will lose about 10% of its current 60M households as “IPTV and internet-based alternatives continue to steal market share”. Jonathan Doran, author of the report, commented that “This is the continuation of a decline that’s already begun as households subscribing to cable dropped by four million between 2007 and 2010. This trend towards canceling subscriptions, or ‘cord cutting’ has arisen due to a combination of the economic downturn and the growing availability of attractive low-cost or free digital terrestrial and internet-based options”. I don’t think you call switching from a cable provider to an IPTV servioce provider “cord cutting” and since Ovum expects global pay-TV revenues to grow by nearly 40% I wonder where they are going.
Speaking of which, AT&T, the largest U.S. IPTV television provider (and HomePNA board member) recently announced that U-verse just had its best quarter of the year - citing the second consecutive quarter of year-over-year wireline consumer revenue growth - significant in view of the continued decline in traditional voice (POTS) service. U-verse TV saw a net gain of 246,000 reaching nearly 3M subscribers.
Notably the multi-service trend continued with over 75% of U-verse TV customers receiving triple- or quad-play services from AT&T (the average Revenue Per User (ARPU) for U-verse triple-play customers over $160). AT&T's has a huge footprint and U-verse can now reach over 27M residences.