OTT opportunity: Traditional pay TV is falling down
The massive worldwide lockdown due to the COVID-19 pandemic has rocketed in-home consumption of audiovisual content and has benefited streaming services.
Regarding its impact on traditional pay television, the health situation aggravated both cable and DTH service outages during 2020, thus intensifying the decreasing tendency of the last few years. Since 2017, these services have been experiencing a systematic loss of subscribers, dropping from 72.2 million to 64.6 in 2020.
According to Digital TV Research, satellite pay TV will lose 3 million subscribers between 2020 and 2026, leaving a remainder of 25 million. The most affected country in 2020, though, was Venezuela. After DirecTV decided to leave the nation, it lost 2.4 million subscribers.
In spite of losing more and more subscribers since its highest peak of 20.9 million in 2016 and regardless of not having the greatest amount of houses with TV sets, Mexico continues to be the Latin American country with the utmost subscribers. In second place is Brazil, territory that reached its highest peak of 19.6 million in 2014 and that is expected to hit its lowest by 2022 to later improve its numbers slightly.
The latest data provided by the Agência Nacional de Telecomunicações, the entity in charge of regulating Brazilian telecommunications, states that the pay television sector ended this last May with almost 24 million subscribers, a base number that is shrinking at a monthly average of 167,000 clients.
For its part, a new research held by Parks Associates on the United States estimates that between 2014 and 2020 the pay TV industry lost more than 10 million subscribers and 40% of the households with internet access started receiving independent services. In 2020 only, more than 7 million families stopped paying for television services. Moreover, according to informitv, the 10 main television service providers lost more than 1.25 million subscribers just during last year’s fourth trimester.
Parks Associates predicts that, by the year 2024, the subscriber base numbers of traditional pay TV will be reduced to roughly 53 million U.S. households, whereas those of vMVPD (virtual Multichannel Video Programming Distributor) will reach more than 23 million.
These tendencies symbolize a unique opportunity for the OTT industry. In 2020, Omdia pointed out that the sector had one of the fastest growth rates ever registered in history. Thanks to the 328 online video services that Omdia tracks for its TV database, it was determined that more than 226 million subscribers turned to SVOD services.