UK pay-TV set for decline | Media Analysis | Business
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In contrast to the buoyant SVOD market which is set to receive a huge boost with the arrival of Disney and Apple within the next few months, the UK’s pay-TV arena is projected to decline by 7.5% until 2023 according to a report from Media Business Insights.
skynews 12sep2017
If played out, this would mean that the UK’s pay-TV market would fall to levels last seen before 2011.

The report states that at present the UK’s pay-TV players account for roughly half of the total revenues generated by the UK TV industry as a whole. Media Business Insights believes that the growth of the market has been driven from 2011-2017 due mainly to the introduction of lite packages which have markedly lower price tags than fuller services. This has seen a number of new entrants to the UK’s pay-TV arena and resulted in the number of UK pay-TV households rising from 54% to 62%.

However, the analyst warns that since 2017, viewing habits have changed putting traditional forms of content aggregation under pressure. The analysis noted that pay-TV subscriptions have been in decline across the board, not just among the legacy providers. Broadcast Intelligence believes this trend to be structural, rather than cyclical.

The report’s authors predict that the number of pay-TV subscribers will continue to decline at roughly the same rate over the next two years and that by 2023, they estimate that 15.4 million households in the UK will subscribe to a pay-TV platform. This will represent a 7.5% decline in the total number of pay-TV subscriptions, or roughly 1.25 million. Yet despite losing pay-TV customers, Broadcast Intelligence expects pay-TV providers’ revenues to grow between 2019 and 2023 to reach £27.8bn, albeit at a lower rate than in the past seven years.

Despite the challenging future facing pay-TV providers, there are still opportunities for them to maintain their pivotal role in the UK content value chain,” said Media Business Insights analyst Jack Genovese.

“The strong relationship platform providers have with their customers makes it appealing for streaming service providers to enter into distribution deals with them. However, securing longevity in the pay-TV market is going to require more nuanced strategic responses than in the past. Platform providers’ ability to raise pay-TV prices to boost ARPU is going to be significantly more constrained as more and cheaper DTC content solutions surface the market. Three important factors in the pay-TV platform of the future will be convenience, ease of use, and comprehensiveness of the content offering.”