Online streaming drives growth
Key headlines:
In Q4 2020, the quarterly growth of global pay TV subscriptions stood at 4.6% , having gone up by more than one percentage point compared to the previous quarter.
In the last 12 months, subscriptions to Netflix, Disney+, Amazon Prime Video, and other OTT services increased by more than 50%. Over the same period, IPTV services over fibre and copper grew by 10% and 5% respectively, satellite TV saw a 7% decline, while cable TV subscriptions increased by less than 1%.
Having launched their service at the end of 2019, Disney+ have already amassed customer base of nearly 100m which is almost half the size of Netflix subscriptions.
Introduction: changes in reporting
This quarter we updated our pay TV subscriber figures by significantly expanding their coverage in terms of geographies and technologies. We added 56 new operators from 34 countries. In addition, while before we mainly focused on IPTV, now we include satellite (DTH) TV, cable TV, DTT, and OTT/online streaming services to paint a more complete picture of TV markets around the world. We believe the OTT figures are especially interesting, given the role of online video in increasing consumer demand for bandwidth and consequently in driving broadband network upgrades.
Our updated sample of pay TV providers includes 162 operators from 66 countries. As we feature dominant pay TV providers from around the world, their total customer base represents the majority of the global market.
Global picture
As of Q4 2020, there were 864 million pay TV subscribers in our sample. The quarterly growth of pay TV subscriptions stood at 4.6% , having gone up by more than one percentage point compared to the previous quarter.
Overall, pay TV subscribers have been growing at 2-3 times the rates of fixed broadband, and with different quarterly growth patterns often determined by the timings of various sports seasons and releases of new content such as popular series.
Technology trends: online streaming dominates
Continuous investment in new content has driven the growth of OTT services, which are the main contributor to the pay TV boom. In the last 12 months alone, subscriptions to Netflix, Disney+, Amazon Prime Video[1], and other OTT services increased by more than 50%. Over the same period, IPTV services over fibre and copper grew by 10% and 5% respectively, satellite TV saw a 7% decline, while cable TV subscriptions increased by less than 1%.
Similar trends can be observed over the last six quarters, with ‘traditional’ pay TV operators losing out to online streaming service providers. One exception is FTTH, mainly due to China alone reporting 315 million IPTV subscribers using this technology. However, streaming giants Netflix, Amazon and especially the new entrant Disney+ are rapidly catching up, despite the fact that they do not lock consumers into long term contracts, enabling them to unsubscribe and re-subscribe as they wish. In fact, it is one of the factors which makes streaming services more attractive compared to the more traditional pay TV services. The latter’s key competitive advantage is sports broadcasting contracts, although the likes of Amazon Prime Video have already ventured into this area by broadcasting tennis tournaments, for example.
Globally, Disney+ subscribers are growing at especially high rates, dwarfing even Netflix, the largest OTT provider at the moment. Having launched their service at the end of 2019, Disney+ have already amassed customer base of nearly 100m which is almost half the size of Netflix subscriptions. It took Netflix nine years to reach the same subscriber number since launching online streaming in 2007. Disney+ saw huge jump in its subscriber growth in Q2 2020, at the height of the global pandemic.
Zooming in to the country level
At a country level, the UK is a good example of the global trends in TV viewing habits. OTT providers Netflix, Amazon Prime Video and Now TV have been growing their penetration among the UK households, while the other TV platforms are either stagnating or losing subscribers.
Q2 2020 and Q3 2020 were especially good quarters for online streaming services as consumers spent more time at home due to the pandemic. The same was not true for the likes of TalkTalk, BT and Freesat. Sky and Virgin Media also still lost subscribers, albeit at a slower rate than before the pandemic began.
Not only in the UK but in many other markets the total pay TV penetration among households, especially when including OTT services, is higher than 100%, with households subscribing to more than one pay TV service. Unfortunately, we do not currently have the OTT subscriber data by country except for the UK. The top ten countries by pay TV household penetration excluding OTT feature a mixture of well developed economies with high GDP and those which high fibre broadband penetration (for example, Portugal, Korea, Hong Kong, China and Belarus).
[1] For Amazon Prime Video, the figures were only available for the UK market.
The data used in this report is taken from Point Topic’s UK Plus service that allows customers to receive comprehensive, accurate and regularly updated broadband market information to support strategic decision making.
Please telephone +44 (0)20 3301 3303 or e-mail isabelle.anderson@point-topic.com for more details.