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On demand popularity will not hurt pay TV subscriptions

Wednesday, April 29th 2015 by Dean Reilly

The number of pay TV subscribers in Western Europe will continue to climb in the coming years, research has found.

This is in spite of a growing number of so-called 'cord-cutters' – those moving away from live broadcast TV in favour of streamed or on demand services – opting to watch their television programmes at a time of their own choosing.

The Digital TV Research Western Europe Forecasts report claims that between 2014 and 2020 the number of pay TV subscribers across 18 countries including the UK, France and Germany will reach 104.8m, a rise of 8.7%.

It adds that the number of pay TV subscribers across Western Europe is expected to climb by 2.57m in 2015 alone, reaching 99m subscribers – with the UK remaining the most lucrative pay TV market in that part of the continent.

However, the media analysis company adds that the growth rate of pay TV viewers will slow down over time.

Simon Murray, principal analyst at Digital TV Research, said: “Despite the number of pay TV homes increasing, pay TV revenues will remain flat at around USD32bn (€29.5 billion).

“ARPU (average revenue per user) is falling in most countries and on most platforms. The pay TV arena is becoming more competitive as newer platforms launch.”

Cheaper channels

He added that it’s often the case that greater competition means cheaper channels and packages for consumers.

The company reported that satellite broadcasting will still account for the majority of pay TV revenues in 2020, but the amount of money that consumers contribute to the sector will fall every year, after starting to decline in 2011.

Telecoms experts who have been debating the future of broadcasting have contrasting opinions on how television will develop.

As Cable.co.uk previously reported, Netflix chief executive officer Reed Hastings said that streaming and internet-based TV will replace traditional TV broadcasting within 20 years.

Oliver Johnson, media analyst at Point Topic disagreed, saying that while streaming services may be more popular than ever, they won’t replace broadcast TV.

Yet for BBC chief technology officer Matthew Postgate, internet technologies could help programme makers to deliver new types of content to viewers, including Ultra HD or virtual reality.

Writing on a BBC blog, Mr Postgate said: "We (the BBC) will increasingly use the internet to deliver programmes and services to you in the future – whether that’s to the big screen in the living room or the smartphones and tablets scattered over the house.”

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