Cord-cutting 'undeniable' in Euro pay-TV markets | OTT | News | Rapid TV News
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A marked decline in the level of pay-TV uptake in 12 European markets is proof positive that cord-cutting is kicking in, says research from IHS Technology.

Until recently, the analyst had regarded cord-cutting as a phenomenon largely confined to the US market where very high pay-TV penetration, high monthly cost and the economic downturn created what it said was a 'perfect storm' that is now seeing a sustained downturn and the emergence of a new sub-group of 'cord-never' households that do not bother taking a pay-TV subscription.

However, IHS Technology's latest European pay-TV Update found Europe no longer remains immune from these dynamics, despite generally lower pay-TV uptake leaving more headroom for growth and because growth from IPTV in the West and low-cost digital satellite in the East has more than made up from losses on cable.

The report identified Q1 2014 declines in Belgium, Denmark, Italy, Malta, Netherlands, Norway, Sweden, Czech Republic, Latvia, Lithuania, Moldova and Poland. Hardest hit were the Benelux and Scandinavian markets along with some of the smaller Central and Eastern European markets where recent strong growth is now reversing. Six of these markets experienced their second quarter of decline suggesting a sustained softening of pay-TV across much of the region. Half of the markets showed a decline have now dropped for two consecutive quarters.

However, in a spot of good news for the region, only Italy of the biggest five markets was in decline while the pay-TV markets in France, Germany, Spain and the UK are all growing above the European average.

Yet growth has also softened on a pan-regional basis, down 30% on the same quarter a year earlier at just 0.66% in the quarter. The analyst found that rapid growth of IPTV and low-cost satellite is beginning to level out, meaning losses on other traditional platforms are not being fully compensated. "While it is easy to point the finger at over-the-top (OTT) services as the cause of cord-cutting, there is no obvious relationship between the markets now seeing a sustained decline and the entry of larger OTT players like Netflix," commented IHS Technology research director, television Guy Bisson,

Further quarters will tell, but the current trend is likely a combination of factors including an overhang from the recent economic downturn and the wider impact of new technology in the home broadening the consumption choices of the average consumer."