UK leads Europe's pay-TV cord-cutters
UK looking beyond the Sky.
Subscriptions to pay-TV services are slowing in Europe and the UK is at the forefront of viewers who are perfectly happy to view their content using free or subscription based on-demand services delivered via the internet.A report by Strategy Analytics found that the UK saw an overall decline of 424,000 subscriptions to pay-TV services such as Sky or Virgin Media during 2018. This was more than any other European country, with less pronounced reductions in Denmark, Switzerland and Germany.
However, pay-TV service subscriptions did rise slightly for 2018 across remaining European territories, reaching 128.5 million with notable growth in Russia and the Czech Republic but the overall trend was a growth rate of 1.3% which was lower than the previous year.
Analysts predict subscriptions across the continent will begin to decline within the next year or two and since the UK pay-TV market is more mature than many of its European neighbours, it has already reached the point whereby it is starting to follow the cord-cutting approach of US households.
Cord-cutting is used to describe a situation where traditional, multichannel pay-TV services from cable or satellite providers are dropped in favour of cheaper (sometimes free) and more manageable subscriptions from OTT (over the top - i.e. over the internet) providers such as Netflix, Amazon Prime, Hulu and YouTube Premium.
The pay-TV market in the US is much more mature than Europe and this has led to a faster take-up of alternative content provision as consumers look for more choice, greater flexibility through monthly subscriptions, and cheaper providers.
Michael Goodman, Director, TV & Media Strategies at Strategy Analytics, said: “We have seen the cord-cutting trend for several years in the US, where the pay-TV business is more mature. Now it is starting to hit major markets in Europe, and this spells trouble for pay-TV operators which cannot adapt to the needs of today’s viewers. The threat of falling subscriber revenues and stronger OTT rivals will also increase pressure from investors for further consolidation across the industry.”
The report also found that Telco operators like Orange and Deutsche Telekom are faring better than traditional cable and satellite players like Comcast (which owns Sky) and Liberty Global, which includes Virgin Media in the UK and Ireland. Telco TV subscriptions rose 5.4% in 2018, compared to a decline for their rivals of 1.3%
Comcast and Liberty Global remain the leading pay-TV providers in Europe, with subscriber market shares of 14.9% and 13.8% respectively but the European pay-TV market remains highly differentiated with the top 5 players only accounting for 50% of subscribers.
With the surge in media companies such as Apple and Disney about to launch their own subscription based TV services, the traditional pay-TV providers are facing something of a challenge and the UK’s initial move away from traditional multi-channel subscriptions could just be the start.
Source: www.strategyanalytics.com, www.broadbandtvnews.com
Image Source: StrategyAnalytics.com
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