Pay TV in Western Europe: trends and forecasts PAY TV IN WESTERN EUROPE: TRENDS AND FORECASTS

Transcription

1 REGIONAL FORECAST REPORT PAY TV IN WESTERN EUROPE: TRENDS AND FORECASTS MARTIN SCOTT AND ROMAN ORVISKY

2 About this report This report provides: forecasts for the number of pay-tv households, services, spend and average spend per user (ASPU) forecasts split by pay-tv platform: cable (analogue and digital), IPTV, pay DTT, satellite and OTT video to the TV forecasts for 16 individual countries and Western Europe as a whole an overview of the trends and drivers in the market top-level overviews of the key countries in the region. WHO SHOULD READ THIS REPORT Product and strategy managers within pay-tv operators who require market sizing for business planning purposes, as well as an overview of key trends affecting the market to help them to develop propositions accordingly. Business development managers within vendors of video solutions who need to assess the size of the opportunity for their products and services. Financial analysts who need to understand the dynamics and the size of the pay-tv market. Geographical Regions modelled: Western Europe Countries modelled individually: Austria Belgium Denmark Finland France Germany Greece Ireland Italy Netherlands Norway Portugal Spain Sweden Switzerland UK REPORT COVERAGE Key performance indicators Pay-TV households (primary pay- TV services) Secondary pay-tv services Total pay-tv services Household penetration Spend linear programming Spend transactional video on demand (TVoD) and subscription VoD (SVoD) Spend total ASPU All of the above split by the following access technologies: cable (analogue and digital, CATV) IPTV pay digital terrestrial TV (DTT) satellite (DTH) OTT video to the TV 1 1 A limited set of KPIs is available in this report for OTT video services to the TV. Additional KPIs will be available in our forthcoming forecasts for OTT video services in Europe. 2

3 Contents 5. Executive summary 6. Western European traditional pay TV will contract after 2021, but growth will still be strong for OTT video services 7. The traditional pay-tv market is migrating to IP and the majority of new spend will be on OTT video services 8. Traditional pay-tv revenue will grow slightly in many markets, but OTT to the TV set will be the main driver of revenue growth across the region 9. Key trends, drivers and assumptions for the mobile and fixed markets 10. Key implications and recommendations for video providers 11. Regional forecasts and cross-country comparison 12. Geographical coverage: IPTV will become the dominant access technology in France, Portugal, Spain and Switzerland 13. Revenue and ARPU: IPTV will drive revenue growth, but top-level ASPU will remain quite stable in the region 14. Access technologies: IPTV will grow as the rest of the market contracts 15. Penetration dynamics: Stable penetration conceals opposing forces 16. Individual country forecasts 17. France: OTT video has been embraced by Orange and CANAL+, but tight bundling will keep traditional services popular 18. Germany: Traditional pay-tv take-up will continue to grow, but OTT video will also gain ground 19. Italy: Operators have embraced OTT video services, which will overtake traditional pay TV around Spain: Falling satellite numbers are counterbalanced by IPTV and cable growth 21. UK: Market evolution is being driven by Sky s embrace of OTT delivery 22. Forecast methodology and assumptions 23. Our spend forecasts focus on linear and on-demand content to the TV 24. Our definition of OTT-video-to-the-TV services 25. About the authors and Analysys Mason 26. About the authors 27. Analysys Mason s consulting and research are uniquely positioned 28. Research from Analysys Mason 29. Consulting from Analysys Mason 3

4 List of figures Figure 1: Traditional pay TV and OTT to the TV set retail revenue, Western Europe, Figure 2: Pay-TV retail revenue growth by service type, Western Europe, Figure 3: Pay-TV retail revenue growth by type and country, Western Europe, Figure 4: Summary of key trends, drivers and assumptions for Western Europe Figure 5: IPTV share of traditional pay-tv connections and OTT video to the TV as a percentage of households by country, Western Europe, 2022 Figure 6: Traditional pay-tv and OTT video to the TV retail revenue, Western Europe, Figure 7: Pay-TV spend and CAGRs by service type, Western Europe, Figure 8: Pay-TV connections and CAGRs by service type, Western Europe, Figure 10: Household penetration of traditional pay-tv services, Western European countries, Figure 11: Household penetration of pay TV by access technology, France, Figure 12: Household penetration of pay TV by access technology, Germany, Figure 13: Household penetration of pay TV by access technology, Italy, Figure 14: Household penetration of pay TV by access technology, Spain, Figure 15: Household penetration of pay TV by access technology, UK, Figure 16: Scope of our pay-tv spend forecasts Figure 17: Definition of OTT video services to the TV Figure 9: Pay-TV connections and ASPU by access technology, Western Europe,

5 Penetration dynamics: Stable penetration conceals opposing forces Penetration will remain stable in many markets, but some individual countries will depart from this trend. Figure 10a: Household penetration of traditional pay-tv services, Western European countries, The overall narrative for many countries is one of stability in terms of penetration, with the opposing forces of OTT take-up and service bundling leading to only weak growth or decline in many markets. However, there are some exceptions to this trend. Greek pay TV has been marred by very high taxation and low consumer interest. Piracy also continues to restrict growth. Traditional pay TV will decline relatively significantly in Denmark and Ireland, but for different reasons. Some lower-value satellite and pay-dtt customers will downgrade to FTA services in Denmark, while traditional pay TV has been in decline since 2013 in Ireland and the launch of Sky s OTT services will exacerbate this. Figure 10b: Household penetration of traditional pay-tv services, Western European countries, Belgian and Portuguese pay-tv penetration is high, and will continue to grow due to weak viewership of FTA content and the ubiquity of high-speed broadband bundled with pay TV. Growth in Spanish pay TV has been strong during and will continue to grow, albeit at a slower rate due to the continued appeal of service bundling and the impact of price competition between Vodafone and Telefónica (Movistar). 15

6 Germany: Traditional pay-tv take-up will continue to grow, but OTT video will also gain ground Traditional pay TV will continue to grow, primarily driven by satellite and at cable s expense. OTT will grow to be significant. PAY-TV MARKET KPIs 2022 The German market is large and well established, and the ASPU for traditional pay TV is low, which will protect it from OTT substitution. Freenet TV will revitalise pay DTT. Sky is likely to gain subscribers, though much depends on whether it opts to follow its UK strategy and launch OTT versions of its services (the operator already offers Sky Ticket, a web TV service). OTT DTT DTH IPTV CATV 69% 28% 16.6 PER MONTH Most consumers in Germany only take Netflix and Amazon Video (despite diverse OTT services), but many take both, which boosts OTT ASPU to near-traditional levels. However, more than twice as many people will take traditional services as OTT services in Figure 12: Household penetration of pay TV by access technology, Germany, PAY-TV MARKET LEADERS % 1%13% 29% 11% 8% 10% 16% 23% 25% 56% Vodafone Sky HD+ other operators Unitymedia Telekom United Internet CATV DTH OTT IPTV 18

7 CONTENTS EXECUTIVE SUMMARY REGIONAL FORECASTS AND CROSS-COUNTRY COMPARISON INDIVIDUAL COUNTRY FORECASTS FORECAST METHODOLOGY AND ASSUMPTIONS ABOUT THE AUTHORS AND ANALYSYS MASON 25

8 About the authors Martin Scott (Principal Analyst) co-ordinates Analysys Mason s research initiatives related to media, TV, fixed broadband and convergence. He manages the Video Strategies and Fixed Broadband Services research programmes. Martin has held numerous positions within Analysys Mason during the last 13 years, including heading the company's Consumer Services, Data and Regional Markets practices. He also launched Analysys Mason's Connected Consumer Survey and Consumer smartphone usage series of research. His areas of specialisation include telco TV strategy, OTT video and media, consumer smartphone usage, the bundling and pricing of multi-play services, including quadruple-play bundling, customer satisfaction and consumer-facing marketing strategy. He also specialises in statistics, surveys and the analysis of primary research. Roman Orvisky (Analyst) is a member of the regional markets research team in London, contributing mainly to the Telecoms Market Matrix, European Core Forecasts, European Country Reports and Global Core Data programmes. Prior to joining Analysys Mason in November 2014, he worked in the Transaction Services department of the Royal Bank of Scotland in a customer experience internship role. During his studies, Roman focused on consumer behaviour in an online context, and has experience in churn modelling in the telecoms sector, social network analysis and browsing data analysis. Roman holds a bachelor's degree in business from Durham University, and an MSc in marketing research from the Tilburg University School of Economics and Management. 26

9 Analysys Mason s consulting and research are uniquely positioned Analysys Mason s consulting services and research portfolio CONSULTING We deliver tangible benefits to clients across the telecoms industry: communications and digital service providers, vendors, financial and strategic investors, private equity and infrastructure funds, governments, regulators, broadcasters, and service and content providers. Our sector specialists understand the distinct local challenges facing clients, in addition to the wider effects of global forces. We are future-focused and help clients understand the challenges and opportunities that new technology brings. RESEARCH Our dedicated team of analysts track and forecast the different services accessed by consumers and enterprises. We offer detailed insight into the software, infrastructure and technology delivering those services. Clients benefit from regular and timely intelligence, and direct access to analysts. 27

10 Research from Analysys Mason 28

11 Consulting from Analysys Mason 29

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