The total number of satellite, cable and telco television subscriptions passed a billion in 2017, despite the continued uptake of online subscription video services, which added three times as many subscribers over the year.
IHS Markit reported that there were 1,034 million traditional television subscriptions globally in 2017, an increase of 35 million on the previous year.
In comparison, there were 401 million online video subscriptions, an increase of 111 million in a year.
“Although pay TV reached a new high, OTT net subscriber additions outstripped net pay TV subscriptions in most regions globally,” said Fateha Begum of IHS Markit. “Traditional pay TV operators have shown resilience in the face of increased competition, through continued investment in set-top functionality, exclusive content and on-demand services.”
Digital pay television growth came largely from the Asia-Pacific region, which accounted for 83% of net additions, largely driven by IPTV growth in China. There were 30 million pay television additions in the region, compared to 74 million additional online video subscriptions.
In Western Europe there were only 2 million new pay television subscriptions, compared to 10 million additional online video subscribers.
In Central and Eastern Europe there were gains of 4 and 3 million subscribers to pay television and online video services respectively.
Unlike other regions, digital pay television subscriptions in North America continued to decline, losing 3 million homes in 2017, while online video subscriptions increased by nearly 30 million.
IHS Markit forecasts that the number of pay television subscriptions will rise to 1,135 million in 2021, a gain of over 100 million, although the rate of growth is expected to slow, from 35 million to 20 million a year.
However, it predicts that online video subscriptions will rise by nearly 250 million to 650 million over the same period. Again, it forecasts that the rate of growth will decline, from 111 million net additions in 2017 to 54 million in 2021.
It is worth pointing out that while homes tend to subscribe to a single pay television service, online video services are not exclusive and members of a home may subscribe to more than one service.
Netflix had 52.81 million paid subscribers in the United States at the end of 2017, compared to 47.90 million at the end of 2016, which is an increase of almost 5 million. So that is only a sixth of the number of new subscriptions in North America suggested by IHS Markit.
Netflix had 110 million paid subscriptions globally at the end of 2017, compared to over 400 million online video subscriptions worldwide implied by IHS Market.
The informitv Multiscreen Index, which tracks 100 leading pay television services globally, shows that the top 10 multichannel services in the United States only lost 1.62 million subscribers in 2017, taking account of the growth of Sling TV and DIRECTV NOW services, which gained 1.56 million subscribers between them. Overall, Dish Network and DIRECTV lost 429,000 and 321,000 subscribers respectively.
Netflix and Sling TV or DIRECTV NOW are very different services. Netflix is more of a complement to pay television, while Sling TV and DIRECTV NOW are direct and intentional substitutes for satellite. Online multichannel services may produce lower revenues but they also involve lower costs per subscriber.
So we need to avoid a reductive narrative that online video is simply eroding traditional pay television subscriptions. They are both continuing to gain customers overall. Online video subscriptions are rising more rapidly, but they are also complementary to traditional video services.