Trends in Pay TV

A quick glance at most any news source today will likely yield some sort of story about evolving TV technology: Google TV, Apple TV, 3D TV, Social TV, “Cutting the Cord”.

Traditional pay TV operators (cable and satellite) are facing new competitors the likes of Netflix, Hulu, Mobile TV companies. According to some sources, pay TV subscriptions are on the decline, while demand for high-speed broadband is on the rise. A recent statistic from Trendwatch.com reported 61% of Western European households had broadband connectivity in their homes at the end of 2008; this number will grow to 67% at the end of 2009 and exceed 80% by 2013.

Are consumers viewing broadband as a viable option to traditional pay TV? Are they ready to cut the cord? Certainly there is still a viable market for traditional pay TV but, traditional operators are likely looking at their legacy video businesses with a new sense of urgency.

IPTV operators are not standing still. They are busily converging technologies to create rich home theater experiences that include: Digital TV, multi-room DVRs, gaming, telephony and more. Mobile video holds great promise. Almost 64% of the world’s mobile data traffic will be video by 2013. Mobile video will grow at a CAGR of 150% between 2008 and 2013 (Source: Cisco 2009).

Consumer media consumption habits are changing and there is a daunting amount of free content available. This means that competitors will need to work harder than ever to attract customers with new offers: 3D, VOD, DVR, Catch-up TV, Social TV and mobile services. Each will likely try to find their niche whether it is exclusivity of premium content or the quality of their network.

One thing is very clear, the game has changed. pay TV players will need to adapt their strategies, strengthen the attractiveness of their offers and to attract more customers and maintain existing customer loyalty. Innovation will be critical.