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Global Pay-TV Market will Reach $324 Billion by 2019

Looking back, last year was a period of great change and disruption for some of the legacy video entertainment market leaders across the globe. As an example, the overall worldwide pay-TV market is expected to have grown by just 5 percent in 2014 -- surpassing 924.4 million subscribers.

Many saturated markets continue to shrink, but there's still pockets of regional expansion. According to the latest market study by ABI Research, global cable TV market growth is now being driven by the Asian-Pacific and Latin American markets.

"IPTV is expected to grow a market leading 14 percent in 2014, followed by satellite TV platform at 7 percent. The growth rates of cable and terrestrial TV platforms are expected to slow to around 3 percent," said Jake Saunders, VP and practice director at ABI Research.

A combination of the two growth regions is likely to add over 13 million new subscribers in 2014, while the cable TV market in North America is expected to decline by approximately 1 percent in 2014.

A case in point: during the third quarter of 2014, the major cable TV operators in North America lost over 400,000 pay-TV customers, although these companies are doing somewhat better in selling more broadband internet access services.

What's driving the ongoing decline of traditional pay-TV in saturated markets? Video streaming services such as Netflix and Hulu, which cost less than $10 for a monthly subscription fees, are attractive alternatives for many prior pay-TV customers.

Traditional pay-TV operators are now trying to compete with these services by developing their own video-streaming products or by integrating these services into their existing offerings.

The leading global online over-the-top video service, Netflix, has agreed to distribution deals with some of the pay-TV operators in Europe to offer its streaming service to their broadband customers.

Canadian companies -- such as Cogeco, Rogers Communications, and Shaw Communications -- also recently announced deals to offer the Netflix video streaming service to their broadband customers.

Bundled packages can help pay-TV operators try to reduce churn. In addition, high-definition (HD) channels, advanced PVR services and premium content -- such as live sport programs -- contribute to increased ARPU.

The worldwide HD subscriber base is growing on all pay-TV platforms. Approximately 57 percent of total pay-TV subscribers will be HD subscribers by 2019. ABI Research forecasts the global pay-TV market could generate $324 billion in service revenues by 2019.

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