It may come as a surprise to learn that the global Pay TV market, which comprises cable, satellite, terrestrial and IP TV services, is still growing its market penetration even now in 2023, at a time when the growth of video streaming services is also accelerating.
However, the growth of the global Pay TV market is likely to hit a peak in the final quarter of this year, before declining for the first time ever next year, according to a report by Ampere Analysis, a leading market researcher.
Global Pay TV penetration is set to hit an all time high of 60.3% by the end of the quarter, Ampere’s latest research says. However, the market is then expected to begin contracting.
The market for Pay TV services has been in decline in North America and Latin America for years already, as more people switch to streaming services such as Netflix, Disney+, Amazon Prime Video and ad-supported offerings such as Tubi, Plex, Pluto TV and Samsung TV Plus. It has become known as the cord-cutting trend, but it hasn’t been so prevalent elsewhere in the world.
Indeed, the growth of Pay TV has continued unabated despite the pressure in the Americas. It has expanded primarily in the Asian Pacific and European markets, where low-cost IP TV services are often bundled with broadband internet packages.
In North America, Pay TV services have been in decline since 2009, falling from an all-time high penetration rate of 84% then to just 45% today. In Latin America, the Pay TV market has been contracting since 2016, down more than 10% from its all-time high of 42%. The decline in these regions is said to be driven by the higher costs of Pay TV services compared to streaming subscriptions. In North America, the average cost of a Pay TV package is currently more than $90 per month.
Ampere says the industry is now losing steam in APAC and Europe, and that it will begin to lose market share in all regions of the world by 2025. By 2028, it predicts that global Pay TV penetration will fall by more than 4% from its all-time high.
Only a few markets are expected to maintain growth during the forecast period, such as Hungary, Portugal and Serbia in Europe, Ampere said.
Even so, Ampere said that cable TV operators are likely to remain a powerful force in the TV industry going forward. It cites the recent distribution deal between Disney and Charter in the U.S., which will see the former’s streaming services bundled with the latter’s Pay TV packages. By acting as distributors, Pay TV providers can help streamers to reach broader audiences.