Pay-TV competition to focus on lower tiers

The low pay segment could become the key battleground for pay-TV over the next few years.

In a new report, TV platform growth forecasts 2012 – 2020, Enders Analysis argues that the process of change towards connected TV could be much slower than has been predicted elsewhere.

Enders says both growth of and competition within the low pay sector will see erosion across satellite, cable and terrestrial platforms. At the same time a change in the balance of funding will work in favour of satellite and cable and against DTT.

“The main area of competition tension is expected to lie with basic pay-TV packages, where the increased greatly increased volume of FTA content via catch-up and the offer of lower price OTT offerings of Lovefilm and others will help to expand the total pay-TV base,” says Enders. “This is suggested by current BT Vision subscriber acquisition trends and greater VMed churn in its lower TV M and M+ tiers. Outside the pay-TV platforms, the impact of YouView expected to be marginal.”

In its report Enders says that while the industry is focused on the disruptive impact of non-linear OTT services, the availability and cost of attractive content has been overlooked.