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How China Became the Largest Pay-TV Marketplace

The video entertainment industry has experienced many changes during the last decade, but few were as dramatic as the shift in global pay-TV growth prospects. While many developed nations reached market saturation, emerging markets in the Asia-Pacific region assumed the market development leadership position.

Pay-TV subscriptions for 338 operators across 89 countries will increase by 200 million from a collective 704 million in 2014 to 904 million by 2020, according to the latest worldwide market study by Digital TV Research.

That being said, China Radio & TV is the world's largest pay-TV operator, by a wide margin. Chinese government policy to consolidate cable TV means that China Radio & TV quickly became the world's largest pay-TV operator -- with 198 million subscribers by the end of 2014.

They will soon represent every cable TV home in China, with a forecast 252 million subscribers expected by 2020 -- that's an upside increase of nearly 54 million compared with 2014 results.

Following China Radio & TV, IPTV operators China Telecom and BesTV will add 14.7 million and 13.2 million subs respectively. In fact, according the the latest Digital TV Research assessment, 12 operators from China and India will collectively add 130 million new subscribers between 2014 and 2020.


Then There's the Pay-TV Downside

The global subscriber growth transition is all the more impressive as 79 (23 percent) of the 338 operators will lose subscribers between 2014 and 2020. Case in point: Korea's CJ Hellovision will lose the most (827,000 subscribers), followed by Germany's Unitymedia (down by 592,000) and Romania's RCS-RDS (down 477,000).

In summary, pay-TV operators within the Asia Pacific emerging markets will see strong growth. In contrast, the North America and Western Europe markets will shrink significantly. Where there's subscriber loss, revenue loss follows. Therefore, many of the pay-TV providers raise their monthly fees, or add new fees that are mandatory for all subscribes (i.e. regulatory recovery fees, etc.).

Sometimes it's a no-win situation, regardless how the market performs. Despite adding 200 million subscribers between 2014 and 2020, subscription and VOD revenues for the 338 operators will remain flat at $183 billion.

Moreover, the dominance of China and India is diminished when the pay-TV operators are ranked by subscriptions and VOD revenues. Led by DirecTV, the U.S. market will take six of the top 10 positions in both 2014 and 2020.

China Radio & TV will add $2.16 billion between 2014 and 2020. In fact, five operators will add more than $500 million in revenues. However, 97 operators (29 percent) will lose revenues, with Comcast (down by $4.6 billion) declining by the most -- followed by Time Warner Cable (down $2.3 billion) and DirecTV (down $1.8 billion).

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