Increased competition between pay-TV operators for subscribers, combined with the increasing popularity of OTT-delivered video, is driving operators to offer more attractive deals on triple-play and quad-play bundled packages in an effort to keep existing subscribers and lure new ones.
A study from Digital TV Research forecasts that by 2016 more than 25 percent of TV households worldwide will have triple-play services, including broadband, telephony and television, helping to grow triple-play revenues to $170 billion by 2016, nearly $100 billion more than the 2010 total. U.S. operators should expect to see $39 billion of the additional revenues, with Japan up by $9 billion and China increasing by $8 billion.
Rapid expansion means that Asia Pacific's triple-play subs will represent 58 percent of that total by 2016, up from 35 percent in 2010. Of the 291 million additional subscribers, 147 million will be in China alone, followed by an additional 24 million in the U.S., 18 million more in India and 13 million extra in Russia. China will supply 44 percent of global 3P subs by 2016.
"The 2016 3P penetration doesn't sound too impressive until you realize that this represents 387 million homes, up from 96 million at end-2010," said report author Simon Murray. "Rivalry for pay-TV and broadband subscribers has never been so fierce--and it's going to get even more competitive. Operators are pushing their bundled packages hard to attract new subscribers and to retain existing ones."
The lowered prices for bundles, Murray said, will mean increased overall ARPU for operators but lower revenues from the component parts: TV, broadband and telephony.
As a result, operators will reduce TV channel choices and will be more reluctant to pay carriage fees for basic channels, impacting revenue streams for content providers.
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