While European pay-TV operators haven’t seen the same cord cutting trend as in North America, over-the-top video – both subscription based (SVOD) and advertising based (AVOD) – continues to gain traction on the continent.
A new report from Dataxis said the European pay-TV market grew by just 0.3% in Q1 2018 over Q4 2017, the lowest quarter/quarter net adds on record, ending the quarter with 185 million subscribers. Since Q 1 2017, pay-TV has seen its subscriber base grow 3.3%.
OTT meanwhile, grew some 50% since Q1 2017 and is up 188% since Q1 2016. From just 1% of the pay-TV market in 2016, OTT increased to 3.3% in Q1 2018.
Dataxis said 35% of the Pay TV subscribers receive direct cable, 31% satellite and 28% IPTV; DTT represents 3% of the subscribers’ total.
According to Dataxis:
- Direct cable represents 64.8 million subscribers, including 42 million for digital cable, down slightly in Q1 2018 from Q4 2017. Liberty Global/ Vodafone accounts for 31% of the subscribers
- Indirect cable (distributed to tenants via landlords) amounts to 18 million
- Satellite decreased more substantially in Q1 2018, losing 400,000 subs since Q4 2017, and down 544,000 since Q1 2017. Dataxis estimates Sky Group and Tricolor (Russia), together hold 50% of the market, and have lost 140,000 and 80,000 subs respectively
- The DTT market remained stable in Q1 2018, losing only 0.35% of its subscribers; it’s down 1.5% in the past two years, despite the launch of Freenet in Germany in 2017, which accounts for 18% of the DTT subscribers and gained 47,000 customers in Q1
- IPTV continued to see growth in Q1, adding 1 million subs in the past quarter. Orange (France) and Rostelecom (Russia) account for 10% and 13% of IPTV subs respectively
Will European operators suffer the same fate as those in North America?
In the U.S., pay-TV operators lost more than 622,000 subs in Q1, and have seen penetration drop as consumers have steadily migrated to OTT platforms.
The disaffection with pay-TV in Europe is milder than in the United States and Canada, where bills for pay-TV generally are more than double those in Europe. But the allure of original content from Netflix, Amazon and others – and the single-digit price tag for those services – nevertheless is having an effect.
A recent report from Analysys Mason posits that paid-for OTT video services’ worth will increase from 8.1 billion euros at the end of 2017 to 18 billion euros by 2022, accounting for more than 80% of TV and video retail growth. SVoD services will account for almost three-quarters of this growth, but operators moving pay-TV services to OTT delivery will also foster multi-billion-euro growth.
Dataxis, earlier this year, said growth in the linear, over-the-top (OTT) pay-TV market in Europe was being driven by specialized content like sports and kids services. Both are seen as key drivers to OTT subscriptions and generally are expected to impact pay-TV subscriptions.
In Eastern Europe, according to research from Digital TV Research, cord cutting has become an issue in both Poland and Russia, where SVOD services like Netflix, Showmax, HBO Go, Ivi+ and Okko have prompted users to switch to OTT services.