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Brands - November 21, 2023

Report projects a fall in Pay-TV penetration in 2024

A new projection has revealed a fall in global Pay-TV penetration for the first time in 2024.

The projection by Ampere Analysis indicated that the number of pay-TV subscriptions relative to the number of households is expected to peak at 60.3% in this year’s fourth quarter before declining by nearly four percentage points between 2024 and 2028.

Although North America and Latin America are driving this shift, all regions will be in pay TV penetration decline by 2025.

In North America, pay-TV penetration has dropped by nearly half, from a high of 84% in 2009 to 45% in 2023, due to high subscription costs and competition from subscription video on demand (SVOD) services. Despite this decline, the annual revenue generated per user will sit at over $1,100 in 2023 across North America, the highest across any region, according to Ampere.

Latin America has also shown large declines in penetration since 2016. This has been led by Brazil, which has seen a drop of roughly 10 percentage points since its peak pay-TV penetration of 42% in 2016.

Pay-TV penetration growth has come primarily from Asia Pacific and Europe — with notably large gains coming from China Mobile since its 2018 acquisition of an IPTV license. This growth has been driven by low-cost IPTV services, which are often bundled into broadband packages for a low or nominal cost.

While these regions will also fall into decline after 2025, there are still some growth markets, such as Portugal, Serbia, Hungary which are expected to see further growth in the forecast period.

Despite the projected decline in the reach of pay TV products due to continued losses in the Americas, “cable and satellite platforms will remain a powerful force in the TV world, and important distribution partners for streaming products,” says Rory Gooderick, senior analyst at Ampere Analysis.

Their distribution clout is illustrated by the recent distribution deal in the U.S. between Disney and Charter, which bundles select Disney streaming services into Charter’s TV packages, Gooderick adds. “This package structure, already increasingly common in Europe and parts of Asia, offers a framework for traditional cable TV companies to transition their business into a streaming aggregation play, and stabilize subscriber trajectories.”

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