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Global Pay-TV Market to Exceed 1 Billion Subs by 2020

The worldwide pay-TV market has surpassed more than 900 million subscribers during the first quarter of 2015, representing 48 percent penetration, according to the latest study by ABI Research.

The traditional pay-TV market is likely to grow slowly but steadily over the next 5 years, mainly boosted by the upside opportunity in emerging markets.

"Half of the world's households will have access to pay-TV service by 2017, representing 1 billion subscribers," said Jake Saunders, vice president at ABI Research.

As pay-TV service providers experience increasing competition from alternative platforms -- such as over the top (OTT) video services -- ARPU continues to decline across the various platforms in most markets.

Many of the legacy operators have added OTT content, multiscreen services, and on demand services in order to compete with alternative video entertainment providers. These services have contributed additional revenue to pay-TV operators, as well as aid in maintaining customer loyalty.

Competition is higher in more mature markets such as North America and Western Europe, where pay-TV penetration is as high as 60 to 80 percent of households. A much slower growth rate is expected to occur in such markets in the years to come.

As broadband infrastructure development speeds up in Asia-Pacific, OTT players are starting to target this important combination of established and emerging markets.

Netflix announced its launch in Australia and New Zealand in March 2015, and possibly adding Japan by the end of 2015. Singapore telco, Singtel is developing an OTT platform called HOOQ, to provide services in the Philippines and other markets within the Asia-Pacific region.

The entrant of OTT services is likely to create higher competition in the overall Asian-Pacific pay-TV market, although it could take a while to gain significant penetration in the region.

Worldwide pay-TV market is expected to reach 1.1 billion subscribers, generating $307.5 billion in service revenue by 2020. The Asia-Pacific pay-TV market is likely to grow faster than most other regions in the years to come.

ABI Research forecasts that pay-TV market in Asia-Pacific is expected to grow at a CAGR of 5 percent, generating $79.4 billion in 2020.

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