ibc_ibc 31/08/2014 13:18 Page 6
IPTV set to overtake DTH in
Western Europe
aying IPTV subscribers will
overtake pay satellite TV ones in
2018, according to a new report
from Digital TV Research. The Digital TV
Western Europe report forecasts that
IPTV subscriptions will climb by 7.5
million (38%) between 2013 and 2020
compared with 1.2 million additions for
both pay satellite TV (up by 5%) and pay
DTT (up 22%). Digital cable will increase
by nearly 13 million (up 42%).
Despite a return to more positive market
conditions, pay-TV subscriptions will only
increase by 8.7 million (6.6%) between 2013 and
2020 to 103.65 million. However, the number of
P
The UK ($7.535 billion)
will still be the most
lucrative pay-TV market
by 2020
digital pay-TV subscribers will increase by 28.1%
(nearly 23 million), with analogue cable subs
falling from 14.03 million to zero by 2019.
Western Europe will reach 159 million
CA market to decline
on pay-TV saturation
The global market for
conditional access (CA)
technology used in STBs is
set to contract as pay-TV
services reach saturation,
according to IHS Technology.
Worldwide market revenue
for pay-TV STB CA technology
will decline to $1.9 billion in
2018, down from a peak of
$2.2 billion in 2015.
CA is defined as any
method or technology that
prevents digital TV content
from being viewed by those
that have not been granted
rights. In STBs, CA clients
come in a variety of
implementations, including
software that is either
embedded into an STB or
comes separate in the form of
smartcards or conditional
access modules.
“The CA market is largely
dependent on pay-TV growth,”
10 ADVANCED TELEVISION
digital TV households by
end-2014, up by 4 million
during the year and by 33
million since 2010. This
total will grow to 174
million by 2020. Free-toair DTT will remain the
most popular platform –
with 44 million primary
homes by 2020. FTA
satellite TV will supply a
further 27 million.
Despite the number of
pay-TV homes increasing,
pay-TV revenues will
remain flat at around $33
billion. Satellite TV will
remain the most lucrative pay-TV platform, but
its revenues will fall every year from 2011 –
despite subs numbers rising. Cable TV revenues
peaked in 2012, but will lose $1.3 billion
(€0.93m/10.2%) between 2013 and 2020 –
although subscriber numbers will also fall (by
2.6%). Digital cable TV revenues will peak in
2017. IPTV revenues will climb by 26.3%
between 2013 and 2020 to $4.91 billion (with
said Wajahat Abbassi, senior
analyst for Connected Home at
IHS. “Shipments of STB CA
clients have grown strongly
during the past 10 years, from
44 million units in 2003 to 246
million in 2013, driven by a
decade of rampant pay-TV
growth. However, this
dependence will make further
growth for CA challenging as
the pay-TV market begins to
slow.”
The global STB contentprotection market contracted
to $2.1 billion in 2013, down
4.5% from $2.2 billion in 2012.
The decline came despite a rise
in shipments of STB CA clients,
such as smart cards, whose
shipments grew 6.0% to reach
246m units in 2013.
The CA market will expand
in 2014 and 2015, with
Chinese and Indian cable TV
digitisation programmes and
further pay-TV growth in
emerging markets. This will
propel STB CA client shipments
subscriber numbers up by 38.4%).
The UK ($7.535 billion) will still be the
most lucrative pay-TV market by 2020.
Despite having the most pay-TV subscribers by
some distance, Germany’s pay-TV revenues
will be a lot lower than the UK – at $4.741
billion. In fact, Italy ($4.539 billion) will not
be too far behind Germany despite having
fewer than half its pay TV subscribers.
to 279 million units in 2015.
Even so, price competition
and a trend toward softwarebased solutions will limit
revenue expansion during the
period, with the industry
growing to just $2.2 billion by
2015.
A total of 53% of TV-owning
households worldwide will
subscribe to pay-TV services by
the end of 2015. This high
level of penetration will limit
further growth opportunities
for conditional access as the
pay-TV market saturates. As a
result, industry value will
decline after 2015.
Cisco Systems currently
leads the CA market with a
32% share of total revenue in
2013. The networking
equipment giant gained market
leadership with its acquisition
of NDS Group from News Corp
and private equity firm Permira
in 2012.
Kudelski Group’s
Nagravision has the second
largest share at 27%. Its 2014
acquisition of Nordic pay-TV
and telecoms operator
Telenor’s conditional access
subsidiary, Conax, will see the
top two players control nearly
65% of the market, at 2013
values.
“Consolidation in the CA
market is not just a result of
commoditisation,” Abbassi
said. “The relationships
between pay-TV operators and
CA providers tend to be among
the most long-lasting and
persistent in the entire TV
technology value chain. Being
able to offer content protection
as part of an overall solution,
alongside other products such
as STBs, STB software or multiscreen video components, is a
strategic advantage for video
technology providers. Doing so
enables them to deliver highvalue solutions that also
benefit from the typically sticky
nature of content-security
relationships.”