The era of traditional pay-TV is expected to be drawing to a close, as a new report from Ampere Analysis predicted a global decline in pay-TV penetration for the first time in history. This shift is being driven by the meteoric rise of streaming services, which offer a more flexible and affordable alternative to cable and satellite packages.
According to Ampere’s findings, global pay-TV penetration is expected to peak at 60.3% in Q4 2023, followed by a steady decline until 2028, when it is projected to reach 56.5%. This downward trend is particularly pronounced in North America, where pay-TV penetration has nearly halved from its peak of 84% in 2009 to just 45% in 2023.
Despite the decline, Asia-Pacific and Europe have bucked the trend, experiencing modest growth in pay-TV penetration in recent years. This growth is primarily attributed to the expansion of low-cost IPTV services, which are often bundled into broadband packages at a minimal cost. However, even these regions are expected to see a decline in pay-TV penetration after 2025.
Roy Gooderick, Senior Analyst at Ampere Analysis, said, “Growth in global pay-TV uptake has been driven over the last five years by Asia-Pacific and Central as well as Eastern Europe. However, declines coming from the Americas, which are driven by streaming competition and the high price of pay-TV in North America, currently sitting at over US$90 a month, will contribute to global pay-TV declining for the first time in 2024.”
“However, despite the projected decline in the reach of pay-TV products, cable and satellite platforms will remain a powerful force in the TV world, and important distribution partners for streaming projects, as evidenced by the recent distribution deal between Disney and Charter in the US, which saw select Disney streaming services bundled into Charter’s TV packages.
“This package structure, already increasingly common in Europe and other parts of Asia, offers a framework for traditional cable TV companies to transition their business into a streaming aggregation play, and stabilise subscriber trajectories.”