The global TV market revenue is set to grow at a steady pace: up 23% by 2018, with over-the-top (OTT) streaming TV fueling growth, according to new research. The study, from research firm IDATE comes at a time when video has become pervasive across all of our screens, most national TV markets are losing steam: [...]
The global TV market revenue is set to grow at a steady pace: up 23% by 2018, with over-the-top (OTT) streaming TV fueling growth, according to new research.
The study, from research firm IDATE comes at a time when video has become pervasive across all of our screens, most national TV markets are losing steam: shrinking viewership and pressure on advertising markets, especially in Europe.
Although pay-TV seems to be holding its own, the fast-growing popularity of OTT offerings is shaking up the traditional pay-TV model, while the demise of physical media is virtually a foregone conclusion.
For Florence Le Borgne, the report's project manager, "if the decline of physical media now seems inevitable, television still has a chance to reinvent itself in a way that takes into account changes in viewer behaviour and competition from new online vendors".
According to IDATE, the number of TV households worldwide will reach 1.675 billion in 2018 (+9.6% in 5 years), with the number of digital TV households worldwide being 1.542 billion in 2018, which translates into 92% of TV households
• Cable will the remain the chief access channel (592.3 million households in 2018) but will gradually lose ground to satellite and IPTV which will account for 32.9% and 10.9% of TV households, respectively, at the end of 2018.
• Despite the development of hybrid TV solutions, terrestrial TV should continue its decline on the first TV set and drop down to number three spot by 2018, with roughly 21% share of the global market.
• The development of hybrid solutions that combine live programming on broadcast networks (terrestrial and DTH) and OTT video services over the open Web is a key variable in the future development of the various TV access modes, and may well shake up current trends.
According to IDATE, the global TV industry's revenue will come to €374.8 billion in 2013 and €459.2 billion in 2018.
• Pay-TV revenue will grow by 21.3% between 2013 and 2018, or by an average 3.9% annually, to reach €220.2 billion in 2018.
• Ad revenue will enjoy even stronger growth of 27.3% between 2013 and 2018, to reach €201.1 billion in 2018.
• Public financing/licensing fees will continue to increase significantly (+7.7% in 5 years) to reach nearly €38 billion in 2018.
According to IDATE, physical media sales will total €16.3 billion in 2018, when video on demand (VoD) revenue will reach €35.4 billion in 2018, which is 90% more than in 2013.
• This means that the global market will have shrunk to more than a quarter of what it was in 2013 (-27.2%).
• Blu-ray will be the most common format and help temper plummeting physical media sales.
• OTT video will continue to be the biggest earner, generating 51% of total revenue.
• VoD will still be the dominant model on managed networks. It will generate €6.9 billion in 2018 versus €2.3 billion for subscription video on demand (S-VoD).
American OTT vendors already have a solid foothold in Europe
Netflix is already present in seven European countries: Britain, Ireland, the Netherlands, Denmark, Norway, Finland and Sweden. The service had 1.6 million subscribers in the UK and Ireland at the end of 2013.
• LoveFilm was reporting 1.9 million subscribers in the UK and Germany at the end of 2013.
• At the end of 2013, iTunes' VoD rental service was available in close to 110 countries, and permanent downloads in 14 countries, chiefly in North America and Europe.