TV & video markets

Despite a swift rise in consumption that is giving the video-on-demand (VOD) sector a real boost, the overall TV market remains a juggernaut and still enjoying an increase in both viewer households and revenue. But competition from OTT is expected to considerably hamper its momentum in the coming year.

On-demand viewing driving growth in a market still dominated by linear TV

The TV sector as a whole continues to grow, despite the threats weighing on the traditional side of the business. Between 2013 and 2017, total revenue increased by an average 4.3% a year, spurred largely by on-demand viewing (+32.7% a year). Growth for the TV market as a whole stands at a more modest 2.3% a year, on average, for that same period. But the outlook remains positive, with average annual growth forecast at 4.2% up to 2021. The market is expected to be worth 546 billion EUR by then. Of that, 80% will be generated by linear TV and 20% by on demand, compared to 88% and 12%, respectively, in 2017.

TV’s chief growth driver in recent years, pay-TV, is losing out to OTT

Pay-TV is one of the main contributors to TV market growth (+3.2% a year). Public TV revenue worldwide is growing only slightly (+0.9%), as is ad revenue (+1.5%) whose momentum in certain developing regions is being hampered by sluggish growth in major markets. But the TV market’s future development is expected to be hindered by the growing popularity of OTT, whose impact will no doubt be felt most keenly in the pay-TV market. Low-cost online VOD services are forcing pay-TV services to drop their prices, and the segment’s growth is forecast to fall to +1.8% a year, on average, between now and 2021.

Every VOD segment is expected to continue to grow, but OTT is clearly the chief driving force: +20.5% a year between now and 2021 compared to +9% for managed services. Generating 108.6 billion EUR in revenue, OTT is forecast to represent 90% of VOD revenue by 2021.

Cable and IPTV gaining on terrestrial and satellite broadcasting

In terms of access, the number of TV households on the planet continues to grow, going from 1.64 billion in 2017 to 1.72 in 2021. Between now and then, virtually all TV access lines will have been digitised (96%) and two thirds of the population will be subscribing to a pay-TV plan. Cable and satellite are expected to be more or less tied in terms of penetration rates (respectively 33% and 31%), as are terrestrial and IPTV (respectively 18.6% and 17.5%). The ubiquity of wireline access (cable and IPTV) is forecast to be even slightly more dense than that of wireless (terrestrial and satellite), thus facilitating access to VOD directly on the living room television.

 
US still the top earner
Breakdown of TV revenue in 2017
North America
181.7 billion EUR
Europe
111.6 billion EUR
Asia/Pacific
120.0 billion EUR
Latin America
38.7 billion EUR
Africa/Middle East
10.8 billion EUR
Public funding
Advertising revenues
Pay-TV revenues
On demand video on managed networks
OTT on demand video
 
Weight of wireline access in the northern hemisphere
Breakdown of linear TV viewing on the main set in 2017
North America
130.1 million TVHH
Europe
314.1 million TVHH
Asia/Pacific
882.7 million TVHH
Latin America
150.6 million TVHH
Africa/Middle East
161.1 million TVHH
IPTV
Cable
Satellite
Terrestrial