TV subscriptions and license fees
The television distribution market consists of revenues generated by distributors of television programming to viewers. It includes spending by consumers on subscriptions to basic and premium channels accessed from cable operators, satellite providers, telephone companies, and other multichannel distributors; video-on-demand (VOD); and television distributed to mobile phones. In the United States, EMEA (Europe, Middle East, Africa), Asia Pacific, and Canada, it also includes pay-per-view. In EMEA and Asia Pacific, public TV license fees also are included.
Market size and growth by region
We project the global television subscription and license fee market will increase from $173.5 billion in 2007 to $280.8 billion in 2012, a compound annual growth rate of 10.1 percent during the five-year forecast period. Asia Pacific and Latin America will average double-digit annual increases—16.1 percent and 14.9 percent, respectively—and EMEA will expand at a 9.6 percent compound annual rate. North America will be the slowest growing, with the United States projected at 7.2 percent and Canada at 5.7 percent. EMEA nearly matched the US in 2007 and will become the largest region in 2008.
Market size and growth by component
Subscription spending—the principal component of the market, at $137.1 billion in 2007, 79 percent of the total—will increase at a 9.3 percent compound annual rate to $214.2 billion in 2012. Pay-per-view will total $5.3 billion in 2012 from $4.1 billion in 2007, a 4.9 percent increase compounded annually. Video-on-demand will rise from $4.2 billion in 2007 to $12 billion in 2012, a 23.5 percent compound annual increase. Public TV license fees will be the slowest-growing category, averaging 1.9 percent annually to $30.5 billion from $27.7 billion. Mobile TV will be the fastest-growing category, from a small base and reaching $18.8 billion in 2012.
Principal drivers
In each region, the shift from analog to digital will fuel growth. In Canada, growth will be less robust because the market already is largely digital. The entrance of telephone companies into the TV distribution market will increase competition and enhance subscriber growth in each region. Expanding digital terrestrial platforms—digital cable and Internet protocol television (IPTV)—will also stimulate growth in video-on-demand usage. Mobile television will become a factor in each region and will be particularly significant in Asia Pacific. Asia Pacific will also benefit from a large increase in the number of TV households. Subscription household penetration growth will drive subscription spending in Latin America, EMEA, and Asia Pacific. In the United States and Canada, where penetration is already approaching the 90 percent level, subscription household growth will play less of a role, accounting for slower increases in those regions. In the United States and EMEA, new technologies are putting price pressure on traditional providers, and high-definition (HD) availability will contribute to growth.
A sampling of global facts and forecasts:
- "The conversion from over-the-air analog to digital television in February 2009 and the growing demand for high definition will boost subscription penetration in the US."
- "Western Europe will grow at a CAGR of 8.0 percent rate compounded annually during the next five years, the same rate as Central and Eastern Europe."
- "In Asia-Pac, TV household growth, an emerging Internet protocol television (IPTV) market, and satellite launches will boost subscription household penetration and subscription spending. "
