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Cable Technology Feature Article

August 20, 2010

ABI Research Focuses on Pay TV Market

By Raju Shanbhag, TMCnet Contributor

In its new report, titled “Pay-TV ARPU and Revenues,” research firm ABI research states that pay TV service revenue is all set to grow in the coming years.

The report presents an overview of pay-TV ARPU and service revenue across three key subscription video platforms: satellite, cable, and telco TV. It supplies ARPU and service revenue forecasts for the related platforms.

Representing approximately 52 percent of the overall pay TV market, the majority of pay-TV service revenue comes from cable TV, the report states. The year-over-year growth of cable TV service revenue is quite low compared to other pay-TV platforms. The major cause for this is the slower subscriber growth in many of the mature cable TV markets, states the report.

Research associate Khin Sandi Lynn notes that, “The increase in service revenue is driven by both increases in subscriber additions and average revenue per user. Many of the satellite TV operators saw rises in ARPU due to their offers of HD programming packages. For example Direct TV ARPU increased from $83.16 in 2Q 2009 to $87.91 in 1Q 2010 as the result of the boost from higher-priced High Definition programming.”

According to the report, satellite TV service revenue increased to $24 billion at the end of 2Q 2010. This is about a 12 percent increase from the second quarter of 2009. The IPTV (News - Alert) market is witnessing growth both in terms of ARPU and aggregate service revenue, states the report. The report estimates that global IPTV service revenue will generate more than $40 billion at the end of 2015.

In a recently released report, the company stated that it is high time marketing professionals take note of the changing trends. The trend starts with smartphones, which have reached critical mass among U.S. mobile subscribers. These powerful devices, coupled with affordable data plans, enable people to search, browse, and watch video in ways and in volumes that have become more and more attractive to marketers.

Raju Shanbhag is a contributing editor for TMCnet. To read more of Raju’s articles, please visit his columnist page.

Edited by Juliana Kenny