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Report: OTT eating into video market share pie

Fri, 10/09/2009 - 8:05am
Mike Robuck

While traditional video providers have downplayed the impact of over-the-top competition, a recent report said videos over the Internet will continue to erode the subscriber base from the multichannel services vendors in the United States.

SNL Kagan’s latest report forecasts that over-the-top providers, such as Hulu, will account for 7.1 million homes by 2013, and for more than twice that number in 10 years.

Overall, SNL Kagan said total TV households are only expected to grow at a 1.3 percent CAGR, and total multichannel subscribers are projected to grow at an even slower rate of 1 percent.

As a result, SNL Kagan forecasts multichannel penetration of TV households declining from 84.4 percent as of year-end 2008 to 83.3 percent by 2019.

According to SNL Kagan’s projections, cable TV will likely experience the greatest losses, dropping from 63.2 million subscribers in 2009 to 60.7 million in 2019.

DBS consumer growth is expected to remain strong over the next few years, growing from 32.2 million in 2009 to 33.6 million in 2013, but it will begin to erode later, falling to 33 million in 2019.

The telecom industry is expected to be the only one to significantly grow its subscriber base in the 10-year outlook – from 5.7 million to 16.7 million.

“Telecoms are well-positioned to grab the majority of new customers,” said SNL Kagan analyst Mari Rondeli. “However, telco’s limited footprint – only 24 percent of total telco homes passed – means cable and DBS will easily maintain the greater portion of the pie. We expect telco video services will be available to 77.8 million households in 10 years, but that still leaves about 54 million without a facilities-based video product.”

The projections were published in SNL Kagan’s “Multichannel Market Trends” report.

More Broadband Direct 10/09/09:
•  Comcast serves notice on bots, viruses with new program
•  Bill to curb loud ads moves thru Congress
•  Cable a bastion against the aporkalypse
•  De la Vega talks spectrum, competition, handsets
•  FCC signals new rules on wireless broadband
•  Tech industry braces for more antitrust scrutiny
•  Report: OTT eating into video market share pie
•  Broadband Briefs for 10/09/09

 

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