Global pay TV penetration, or the number of pay TV subscriptions relative to the number of households, is expected to record its first annual decline next year, according to new research from Ampere Analysis.
The firm forecasts that pay TV penetration would peak at 60.3% in the fourth quarter of 2023, adding that it will fall by almost four percentage points by 2028.
According to Ampere, pay TV penetration in North America has almost halved from a high of 84% in 2009 to 45% in 2023, caused by “a combination of high costs and competition from a mature Subscription Video on Demand (SVoD) market.”
“Despite this decline, the annual revenue generated per user will sit at over $1,100 in 2023 across North America, the highest across any region,” the firm added.
Latin America has also shown large penetration declines since 2016, largely led by Brazil, which has posted a drop of roughly 10 percentage points since its peak pay TV penetration of 42% in 2016, according to the report.
“Although North America and Latin America are driving this shift, all regions will be in pay TV penetration decline by 2025,” Ampere said.
Meanwhile, Asia Pacific and Europe have seen the highest penetration growth in recent years, with large gains coming from China Mobile after it acquired an IPTV license in 2018.
“This growth has mostly been driven by low-cost IPTV services, which are often bundled into broadband packages for a low or nominal cost,” Ampere explained. “While these regions will also fall into decline after 2025, there are still some growth markets, such as Portugal, Serbia, Hungary which are expected to see further growth in the forecast period.”
Despite the projected decline for pay TV, Ampere senior analyst Rory Gooderick anticipates that cable and satellite TV platforms will remain a “powerful force in the TV world, and important distribution partners for streaming products.”
Gooderick cited the recent distribution deal between Disney and Charter Communications, which bundles the entertainment giant’s streaming services into the latter’s TV packages.
“This package structure, already increasingly common in Europe and parts of Asia, offers a framework for traditional cable TV companies to transition their business into a streaming aggregation play, and stabilize subscriber trajectories,” Gooderick said.
