Cable revenues are holding up despite pressure from OTT platforms and an accompanying content arms race.
Presenting the annual analysis of the cable sector by IHS Markit, the now independent analyst Ben Ken, showed that pay-TV subscriber numbers had fallen in both western and eastern Europe.
However, broadband continues to be cable’s saviour, steadily increasing the ARPU (average revenue per unit) as speeds rise.
“The overall revenue per user keeps climbing up, now €24, and we’re going to see it climb higher for those that offer mobile too,” said Keen. “The value of the cable customer is being recognised by the amount of M&A activity”.
More than 2.7 million Revenue Generating Units (RGUs), the industry metric for the total sum of TV, internet and telephony subscriptions, were added in 2016, and the total across Europe is now 118.24 million.
But it is in video where the market is shifting, as Netflix and Amazon begin to overtake incumbent content providers. Only in France, Russia and Poland do online video players not appear in the Top 5 video ranking.
In the UK, Netflix’s 6.03 million subscribers is second only to Sky’s 10.74 million; in Germany Amazon on 2.76 million is behind just Unitymedia and Vodafone.
“They are becoming part of the major subscription landscape and it’s good news because customers have an appetite to pay for subscription video.”
Keen described a content arms race that allowed the global players to invest internationally – though increasingly with local commissions – outranking the expenditure of the incumbents who themselves are increasing investment.
And ultimately it is the traditional operators that are taking the bulk of revenues from an expanded pie.
Cable Subscribers 2016 at a Glance
|Total Cable Unique Homes:||0.004||64.44m||(64.17m in 2015)|
|RGUs:||0.023||118.24m||(115.53m in 2015) => 2.7 million RGUs added|
|Broadband subscribers||0.059||35.62m||(33.62m in 2015)|
|Telephony subscribers||0.036||27.75m||(26.78m in 2015)|
|TV subscribers||-0.005||54.87m||(55.12m in 2015)|
|Digital TV subscribers||0.063||36.40m||(34.23m in 2015)|
|Analogue TV subscribers||-0.116||18.47m||(20.89m in 2015)|
|66.3% of TV subscribers are now digital|
Cable Revenues 2016 at a Glance
|Total cable revenues||0.046||€23.45bn||(€22.42bn – 2015)||€1bn revenues added|
|Broadband revenues||0.075||€7.70bn||(€7.16bn – 2015)|
|Telephony revenues||0.021||€4.83bn||(€4.73bn – 2015)|
|TV revenue||0.037||€10.91bn||(€10.52bn – 2015)|
|Digital TV revenue||0.085||€8.26bn||(€7.61bn in 2015)|
|Total VOD revenue||0.141||€462m||(€405mn in 2015)|
|Analogue TV revenue||-0.127||€2.19bn (€2.51bn in 2015)|
|80% of TV revenues are DIGITAL (includes VOD)|