Digital Lifescapes

It's interesting to look back over the last few years of ups and downs within the American video entertainment and associated broadband internet access markets. The ongoing market transitions have created a volatile environment, where service providers react to the constantly shifting customer demand. Leichtman Research Group (LRG) reported that the thirteen largest pay-TV providers in the U.S. -- representing 95 percent of the market -- lost about 380,000 net video subscribers in 2015, that's compared to a loss of about 150,000 subscribers in 2014, and a loss of about 100,000 subscribers in 2013. The leading American pay-TV providers now account for 94.2 million subscribers -- the top nine cable companies have over 49 million video subscribers, satellite TV companies 33.7 million subscribers, and the top telephone companies 11.5 million subscribers. Shrinking Demand for Pay-TV Service Truly, 2015 was another year of transition for American pay-TV service providers. Th...

Reporting on the American pay-TV market during the last couple of years was somewhat predictable -- it's been an ongoing decline of subscribers as price increases motivated consumers to consider other video entertainment options. More and more American baby boomers in urban areas bought a digital TV indoor antenna and switched to free over-the-air HDTV broadcast services. For younger adults, traditional pay-TV wasn't viable -- why pay for advertiser-supported content that's available online for free or at a much lower cost via Hulu? Furthermore, as more online subscription video-on-demand services -- such as Netflix and Amazon Prime -- gained momentum, it became clear that the traditional mass-media TV was losing its appeal. Besides, a movement toward the adoption of over-the-top video entertainment seemed to be perpetual. But this market shift could still decelerate, given some of the recent trends. According to the latest market study by Leichtman Research Group (L...

The video entertainment distribution sector is still evolving. Case in point: the pay-TV operators within North America continue to be challenged during the second quarter of 2015, as significant new subscriber losses pose an ongoing threat to their core business model. The latest market study by Strategy Analytics indicates that the top twenty pay-TV operators in the U.S. -- accounting for more than 95 percent of the total market -- reported subscriber losses of 479,000, while the Pay-TV operators in Canada lost 53,000 customers. According to their assessment, total subscribers among the tracked pay-TV operators in North America declined at the highest rate that they've seen so far. The transition from analogue to digital television platforms hasn't improved the situation. Digital TV subscriptions in the U.S. market fell by 62,000. Moreover, in Canada, digital TV subscriptions declined for the second straight quarter -- with estimated losses totaling 9,000. While subsc...

If you look back over the past decade, while the Global Networked Economy has evolved as the leading nations in the Asia-Pacific region continue to expand their infrastructure capabilities, the market for broadband Internet access in America has been remarkably stable. While the FCC has historically been tasked with administering the nation's communications laws and associated regulation, it has struggled to have an impact with the part of its charter that's focused on "supporting the nation's economy by ensuring an appropriate competitive framework for the unfolding of the communications revolution." By and large, even in the major metropolitan areas of the country, a duopoly still exists -- where the majority of wireline broadband internet subscribers are being served by either a single local incumbent cable company and/or a single legacy telephone service provider. Once again, Leichtman Research Group (LRG) has provided some illuminating market data that...

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 ...

Home automation is reaching an inflection point. Service providers -- including telcos and cable operators -- are introducing a range of offerings to this market. The intersection of home automation services with wearables, Internet of Things (IoT) sensor technologies, big data analytics, and health management services creates new opportunity. A growing roster of smart home services and device providers are using home security monitoring as a beachhead to introduce home automation services, according to the latest worldwide market study by ABI Research. In the key U.S. market, considered by industry analysts to be a bellwether for developed markets around the world, around 15 million more U.S. homes will invest in new connected home security services in the next 5 years. "After decades where penetration into U.S. households stalled, home security adoption is set for significant growth," said Jonathan Collins, principal analyst at ABI Research . However, it will not b...

The seventeen largest cable and telephone service providers in the U.S. -- representing about 94 percent of the market -- acquired 3 million net additional broadband Internet subscribers in 2014, according to the latest market study by Leichtman Research Group . Annual net broadband additions in 2014 were 114 percent of the total in 2013. These top broadband providers now account for 87.3 million subscribers -- with cable companies having 51.9 million broadband subscribers, and telephone companies having 35.4 million subscribers. Other key findings from the market study include: The top cable companies netted 89 percent of the broadband additions in 2014 – compared to 82 percent of the broadband additions in 2013. The top cable companies added 2.65 million broadband subscribers in 2014 – 123 percent of the total net additions for the top cable companies in 2013. The top telephone companies added about 345,000 subscribers – 72 percent of the total net additions for the top tele...

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 approxim...

The device that broadband service providers place in a subscriber's home could be a point of differentiation, but most are basically alike. The vendors merely attempt to reach parity with the stated industry standard requirements. The products are often procured based upon the lowest price. It's surprising that there is no start-up company that's truly attempting to disrupt this product category. Surely, the service providers would notice if anyone created some meaningful and substantive innovation. Telecom and cable companies have said that they crave vendors that offer new ideas. Worldwide broadband customer premise equipment (CPE) shipments are expected to reach 151.9 million by the end of 2014, according to the latest worldwide market study by ABI Research. "The residential gateway segment continues to grow at a rapid pace. We expect global shipments will grow more than 9 percent in 2014," said Jake Saunders, VP and practice director at ABI Research . ...

What happened to the legacy video entertainment market in America, and why has HBO announced that they will -- for the first time -- choose to bypass the traditional pay-TV distribution channel to reach new customers? While residential broadband internet access will soon reach 100 million households in the U.S. market, legacy pay-TV subscription services have already peaked and are in a slow decline. According to the latest market study by The Diffusion Group (TDG), during the next few months, and for the first time in history, the number of home broadband subscriptions will surpass the number of home pay-TV subscriptions. In September 2014, TDG surveyed 500 adult broadband users that did not subscribe to a traditional home pay-TV service -- such as those offered by cable, satellite or telco network operators. Based upon the TDG market assessment, they uncovered that 14 percent of adult broadband users do not use a legacy pay-TV service -- that's up from 9 percent in 2011, ...

The traditional video entertainment industry in developed nations had a difficult period of transition last year, as retail sales of content on DVD and Blu-ray discs was either flat or declining, and pay-TV revenues were somewhat spotty. The days of huge gains appear to be over in many of the key saturated markets. Regardless, some industry analysts remain hopeful for a market recovery. The global pay-TV subscriber base increased by a little more than 5 percent in 2013, raising the total to 901.1 million. However the average revenue per user (ARPU) dropped to $23.80 in 2013 -- from $24.10 in 2012. "In general, the pay-TV market grew both in terms of subscribers and service revenue across all pay-TV platforms. Overall pay-TV service revenue reached almost $250 billion in 2013," said Jake Saunders, vice president at ABI Research . Pay-TV ARPU in North America increased around 4 percent to $76.00 in 2013. According to legacy pay-TV operators, the growth in ARPU is due to...

As lower-cost online alternatives gain momentum, more Pay-TV service providers are attempting to make their legacy video entertainment offering more attractive by adding new features to their standard subscription package. DirecTV’s Genie, Liberty Global’s Horizon, Dish’s Hopper and the HD DVR boxes that power Comcast’s X1 service all have something in common -- other than better marketing names than an older generation of boxes more commonly known by their model numbers. According to the latest market study by ABI Research, these feature-rich devices bring more channel tuners to centralize digital video recorder (DVR) resources -- minimizing DVR conflicts, as well as better processing power. This increased processing power improves responsiveness and the device user interface. ABI believes that deployment of the device will also act as a Trojan Horse -- while pay-TV operators try to extend home automation and energy management services into their subscriber homes. These featur...

Incumbent U.S. pay-TV service providers would rather forget 2013 -- since it will be remembered as one more year where the major MSO cable operators collectively reported hundreds of thousands more video subscriber disconnects and service downgrades each and every quarter. In urban markets throughout America, price-sensitive consumers abandoned traditional pay-TV service and turned to a combination of free over-the-air broadcast digital television and subscription streaming OTT video entertainment offerings -- such as Netflix and Hulu. In some markets Telco challengers gained new pay-TV subscribers with limited-term lower-price service bundle promotions. However, once the promotions expire, some of these subscribers fail to convert to full-price customers. The story is very similar in other saturated markets all around the world. Global Pay-TV Subscription Market in Transition Infonetics Research released findings from its latest "Pay TV Services and Subscribers" mark...

As consumer electronics and video entertainment industry analysts are preparing to descend upon Las Vegas once again, to attend the International CES next week, perhaps now is the perfect time to consider the outlook for the evolving pay-TV sector. Infonetics Research has released excerpts from its latest global market study and associated report, which tracks pay-TV subscribers and video equipment sold to telco IPTV, cable and satellite television service providers. "Pay-TV providers are sweating their existing encoding assets as they wait for the next generation of platforms that support HEVC (high efficiency video coding) so they can reduce current bandwidth requirements while preparing for ultra-definition TV, such as 4K," said Jeff Heynen, principal analyst for broadband access and pay-TV at Infonetics Research . According to the Infonetics global market assessment, demand for contribution encoders among broadcasters will remain steady through 2017, with increases ...

Telecom and Cable TV broadband service providers have continued to invest in their infrastructure during 2013. Broadband customer premise equipment (CPE) shipments at the end of 2013 were expected to surpass 147 million units, according to the latest global market study by ABI Research. The CPE devices counted include broadband modems, wired routers, and home gateways. Despite a growing broadband subscriber base and increasing demand for advanced broadband services, broadband CPE shipments are only expected to grow to 150 million in 2014. "Increasing adoption of fiber-optic broadband services is driving the growth of fiber-optic CPE shipments," said Jake Saunders, VP and practice director at ABI Research . Fiber-optic CPE will represent 26 percent of overall broadband CPE shipped in 2014. Cable and DSL CPE devices will have equal market share of around 37 percent. As cable broadband operators rapidly extend to DOCSIS 3.0 networks, related DOCSIS CPE shipment is gainin...

The digital video entertainment industry has seen mixed results this year, as pay-TV service providers find little growth in saturated markets. Regardless, the worldwide pay-TV subscriber base surpassed 886.5 million at the end of 3Q 2013 -- that's a 6 percent YoY increase, generating $62.6 billion service revenue in the third quarter. "Emerging markets are key drivers of global growth in pay-TV subscribers as developed markets are experiencing flat growth rates,' said Jake Saunders, VP and practice director at ABI Research . The pay-TV subscriber base in Western Europe grew less than 2 percent in 3Q 2013 from 3Q 2012. Notably, the number of subscribers in Spain and Italy has been declining for a number of consecutive quarters. Respectively, pay-TV service providers in Spain and Italy lost over 7 percent and 2 percent of their total subscriber base compared to a year ago. Pay-TV operators blame the weak economic environment for declining subscriber counts, but it ...

Communication service providers can no longer continue down their traditional path of revenue generation and expect to survive, due to the overwhelming evidence that their legacy business strategy is obsolete. Dramatic shifts and changes in the marketplace now require decisive action. Small incremental tweaks to old business plans and established financial models cannot result in the desired outcomes. A major crossroads has been reached. There are two options; either adapt to the apparent market realities or continue along the road to perpetual decline and eventual ruin. The global telecoms industry revenue will remain roughly flat over the next few years, with a decline in spending on voice services counterbalanced by growth in spending on mobile and fixed (broadband) data services, according to the latest market study by Ovum. In a recent market forecast analysis, it was determined that as growth slows, market realities mean that communication network service providers must fin...

AHCIET and Ovum launched the Observatory of Telecoms Indicators in Latin America. Its objective is to measure and analyze the digital ecosystem as well as identify and quantify the socioeconomic contribution of the telecoms industry to the growth and welfare of the Latin American economy. In its first study, the AHCIET-Ovum Observatory concludes that telecoms services have increased their impact in Latin America. Not only have they become increasingly present in the daily lives of millions of Latin Americans who communicate and work using new access technologies; they are also expanding their influence and contribution to the economic development of the countries in the region. The telecoms sector has had a significant impact on national economies in Latin America between 2008 and 2011, generating growth in fixed (72%) and mobile (41%) Internet connections. At the same time, entry-level tariffs have fallen substantially, enabling new users to join the information society. Job...

Infonetics Research released excerpts from its latest pay-TV subscribers market study and forecast -- which tracks IPTV, cable, satellite, hybrid set-top boxes (STBs) and over-the-top (OTT) media servers. "Contrary to popular opinion, the set-top box market is alive and well," says Julien Blin, directing analyst for consumer electronics and mobile broadband at Infonetics Research. STB revenue grew almost 10 percent in 2012, and that's a considerable rebound from a year ago. The global market will remain healthy in the near term as operators in China, India, and Latin America add new digital video entertainment services. Video gateways and media players will be the real standouts moving forward, as North American and European cable and satellite providers transition away from digital STBs. Infonetics says that they expect video gateways to grow from just 1 percent of total cable and satellite STB shipments in 2012 to 16 percent by 2017. They also expect to see s...

If you've followed the news last year about the consistent decline in cable TV subscribers within the United States, then you may have assumed ​that the overall market was in decline. The worldwide pay-TV market actually grew at a steady pace in 2012 generating $238 billion by end-of-year, that's up from $223 billion in 2011, according to the latest market study by ABI Research. The global pay-TV market is expected to generate $304 billion in 2018 with a compound annual growth rate (CAGR) of 4 percent. In some markets, continued revenue growth will likely come from increases to subscriber fees -- not from the addition of new subscribers. That being said, the global service revenue contributions from cable TV are proving to be mixed, according to ABI's current assessment. The Asia-Pacific region saw service revenue growth due to underlying increase in subscriptions. However, cable TV operators in North America are experiencing an ongoing decline in service revenue ...