Cord cutting due to the rise of streaming services and the high prices of pay TV have significantly reduced pay TV penetration in the US in recent years, while Asia Pacific and Europe continued to experience growth. Now research firm Ampere Analysis predicts that this will change: it predicts that in 2024, for the first time, there will be an annual decline in global pay TV penetration, that is, the number of pay TV subscriptions in relation to the number of Households.
“This will follow pay TV penetration peaking at 60.3 percent in the fourth quarter of 2023,” a new report summarizes. “By 2028, global pay-TV penetration will decline by nearly four percentage points.” The decline in pay-TV “was driven by North America, but by 2025 all regions will be in decline,” it highlighted.
“Growth in global pay-TV usage over the past five years has been driven primarily in Asia Pacific and Central and Eastern Europe,” said Rory Gooderick, senior analyst at Ampere Analysis. “However, declines from America, driven by streaming competition and high pay-TV prices in North America, currently over $90 per month, will contribute to global pay-TV penetration in the The year 2024 will decline for the first time.”
In North America, pay-TV penetration has nearly halved from a peak of 84 percent in 2009 to 45 percent in 2023, “due to a combination of high costs and competition from a mature subscription video-on-demand market.” market (SVOD),” noted Ampere. “Despite this decline, annual revenue generated per user will exceed $1,100 across North America in 2023, the highest in any region.”
Latin America has also shown a decline in penetration since 2016, led by Brazil, “which experienced a decline of approximately 10 percentage points since its peak pay-TV penetration of 42 percent in 2016,” the report said.
In contrast, the Asia Pacific and Europe regions have seen the highest growth in pay TV penetration in recent years, “with China Mobile making big gains after acquiring an IPTV license in 2018,” Ampere explained. “This growth has been driven primarily by low-cost IPTV services, often bundled into broadband packages at low or nominal cost. While these regions will also decline after 2025, there are still some growth markets such as Portugal, Serbia and Hungary that are expected to see further growth over the forecast period.”
Ampere says bundling services offers a key opportunity here, pointing to the recent carriage deal between Walt Disney Co. and Charter Communications as a possible blueprint. “Despite the projected decline in the reach of pay-TV products, cable and satellite platforms will remain a strong force in the television world and important distribution partners for streaming products, as demonstrated by the recent distribution agreement between Disney and Charter in the US.” Disney streaming services bundled into Charter’s TV packages,” Gooderick said. “This package structure, already increasingly common in Europe and parts of Asia, provides traditional cable TV companies with a framework to transform their business into a streaming aggregation play and stabilize subscriber growth.”