Published on the 12/11/2015 | Written by Donovan Jackson
Make space Sky, TVNZ, Freeview and Mediaworks, because telcos are becoming pay-TV operators…
That’s emerged in a new study from market analyst Ovum, which said telecoms operators already provide around one-fifth of the world’s pay-TV subscriptions.
Operations owned or controlled by telcos accounted for 140 million retail pay-TV customer connections globally at the end of 2014, a total which soared to 177 million during 2015 – equivalent to 19 percent of the total pay-TV subscriber base (up from 14 percent year-on-year.
According to Ovum’s research, the Telco TV subscriber base is projected to grow at a compound annual growth rate (CAGR) of 4 percent to 2020 (compared with 2 percent across the wider pay-TV market), reaching 210.4 million. While IPTV will remain the dominant means of delivering Telco TV, it said traditional cable and satellite platforms will also continue to play a big role.
Ovum defines Telco TV as any subscription-based pay-TV operation provided directly by an operator whose core business is the provision of voice telecoms and/or broadband access services. As such, the Telco TV universe includes a large proportion of cable and satellite as well as IPTV customers.
Kym Niblock, CEO of Spark’s pay-TV service Lightbox, described Ovum’s research as “an astute observation and one Spark has been aware of for some time, which is why Lightbox exists.”
It is arguable that with the billing support systems and the backing of hefty balance sheets, telco operators enjoy a substantial advantage in creating the necessary infrastructure to deliver pay-TV services. They also enjoy existing relationships with customers (though these are not always cordial), which can be leveraged to drive adoption; Spark, for example, has enthusiastically provided its customers with several months of free Lightbox viewing to get them on board.
Niblock said Spark recognised the global change that was coming in video consumption. “With demand for connectivity and data rapidly increasing, and technology disrupting a number of adjacent industries, such as media…several market opportunities [have emerged]. Online or streaming TV was identified as a high growth market overseas…We saw internet TV as a good adjacent opportunity because Spark can leverage its advantages of scale, a large customer base, leading networks and platforms, good distribution channels and strong brands.”
Ovum principal analyst Jonathan Doran said the growing share of ‘traditional’ TV platforms within the Telco TV base reflects a recent shift towards a global consolidation of pay-TV operations, in which telcos are playing a significant part. “The jump in subscriptions during 2015 is comprised mostly of direct-to-home (DTH) satellite subscriber additions resulting from M&A initiatives.”
Throughout the forecast period, Ovum said around half of Telco TV subscriptions will be delivered via IPTV networks, with cable and satellite serving a projected 12 percent and 37 percent of connections, respectively, by 2020.
Doran said that ultimately, Ovum expects to see a continuation of today’s Telco TV platform mix, at least for the foreseeable future; with its share of the pay-TV customer base now substantial and expected to remain stable going forward, it said Telco TV is here to stay.
