Pay-TV revenue in world’s Top 10 markets forecast to drop 25% by 2025

pay-TV revenue

Despite a rise in the number of subscribers globally, pay-TV revenue in the 10 largest markets are expected to decline 25% between 2019 and 2025 as cord cutting continued to increase and consumers looked to bundle more services. Revenues are forecast at $102.9 billion in those markets, falling from $137.8 billion in 2019.

Across 138 markets globally, total revenue is expected to plummet to $150 billion after reaching a high of $202 billion in 2016, according to a study from Digital TV Research (DTVR). Subscriber numbers are expected to increase $35 million globally.

The biggest decline forecast is in the US which is expected to see a decline of more than 35%, to $57.4 billion in 2025 from $88.5 billion in 2019. Operators in the US have seen cord cutting numbers grow over the past several years, with more than 2 million subscribers leaving in Q1 2020 alone.

Pay-TV revenue growth expected in China, India

Revenues in the world’s No. 2 market, China, are expected to grow about 1.3% by 2025 to $10.1 billion, essentially flat over the period.

Operators in India also should see growth over the period, driven by a burgeoning middle-class that should push revenues up nearly 16%, about $812 million, to just less than $6 billion.

That increase – combined with declines in other markets – would make India the No. 3 market in the world, pushing past the United Kingdom (currently No. 3), Canada (currently No. 4) and Brazil (currently No. 5).

The second biggest revenue gains will be in Indonesia, up $719 million.

LatAm hit hard as double-digit declines seen in Brazil, Argentina, Mexico

Argentina, which in 2019 ranked as the 10th-largest market in the world, is forecast to see pay-TV revenue decline 66% to $1.1 billion from $3.2 billion. The market once was the third largest in Latin America, behind only Brazil and Mexico.

Research from Buenos Aires-based Business Bureau shows the pay-TV industry plateaued in 2019 after a decade of growth and said younger consumers now were rapidly adopting OT instead. At the same time, according to the researcher, “the big Pay-TV players have been reinventing themselves, launching their own OTTs and becoming super content aggregators in the process,”

Mexico, despite a forecast 10% decline in pay-TV revenue to $2.8 billion, isn’t in the Top 10 as of 2019, but it expected to move past Argentina onto the list by 2025.

Brazil, meanwhile, has seen subscriber numbers plummet in recent quarters. The National Telecommunications Agency said operators lost 10%, or 1.78 million, subscribers in 2019 alone. Brazil is forecast to see a nearly 21% decline in pay-TV revenue by 2025 to $4.2 billion from $5.3 billion.

Pay-TV revenue declines in nearly half of markets

Revenues will decline in 61 countries between 2019 and 2025, DTVR said. In North America, aside from the massive $31 billion in US losses, operators in Canada will lose more than $1 billion in revenue, falling to $5.1 billion from $6.1 billion, or a 17% decline.

Among other losses in Top 10 markets:

  • France: to $3.5 billion from $4.1 billion (-15.3%);
  • Germany: to $3.4 billion from $3.9 billion (-12.8%); and
  • United Kingdom: to $5.8 billion from $6.6 billion (-12.8%).
  • Japan, currently the 7th largest in terms of revenue, is expected to see a modest loss of 4.9% to $4.7 billion from just less than $5 billion.

“Much of the losses are down to subscribers converting from standalone TV to a bundle where they pay more overall to the operator but less on TV services,” said Simon Murray, principal analyst at DTVR. “ Cord-cutting is also a major problem, especially in the US.”

The bottom line

By 2025, nearly 81% of all pay-TV revenues will come from the Top 20 markets, with more than half (56%) coming from the US, China, India, the UK and Canada.

Revenues among operators across delivery technologies are forecast to decline, with satellite TV revenues down $18 billion (including $14 billion in the US alone), IPTV revenues will be flat and global cable TV revenues will slip to $63 billion from their 2012 peak of $97 billion.

And, according to Murray, those 2025 numbers are based on live sports returning in August. If that’s not the case, he said, churn will be far worse.

The big winner, of course, is OTT. SVOD, AVOD and hybrid services are popping up like mushrooms after a spring rain, looking to replace traditional pay-TV and broadcast delivery. Don’t wait too long.

Stay tuned and stay well.

Jim O’Neill is Principal Analyst at Brightcove. You can follow him on Twitter @JimONeillMedia and on LinkedIn