North American pay-TV revenue will drop 26% between 2015 and 2023 to $75.13 billion, a recent report from Digital TV Research predicted.
Cable TV revenue hit its heyday in 2015, garnering revenue of $101.71 billion, according to the North America Pay-TV Report, published this month. By 2023, that revenue will tumble to $36.75 billion -- a 32% free-fall, Digital TV Research said.
Although it's already suffered most of its heaviest losses, cable will lose almost 12 million subscribers total between 2010 and 2023, the researcher found. But satellite and IPTV also are losing subscribers and revenue, said Simon Murray, principal analyst at Digital TV Research, in a statement.
"Much of this is due to the operators shifting their subscribers to online platforms," he said. "However, growth from vMVPDs is not expected to make up completely for the subscriber and revenue shortfalls from traditional pay-TV."
Virtual multichannel video programming distributors (vMVPD) -- a.k.a. skinny bundles -- include PlayStation Vue, DirecTV Now and Sling TV. Typically competing on a combination of price and the number of local TV stations included in their bundle, the number of vMVPDs has skyrocketed. With no contracts, subscribers often shop around, jumping from provider to provider with little to no loyalty, the Diffusion Group found in 2017.
These vMVPDs ended last year with approximately 5.3 million subscribers, "TDG reported. Dish-owned OTT Sling TV was responsible for about 2.3 million of those subscribers (43.4%), the research firm said. DirecTV Now came in second with 1.2 million (22.6%), followed by third-place PlayStation Vue with 0.6 million (11.3%), TDG said.
AT&T's encouragement of its subscribers to transition to DirecTV from its IPTV-based U-Verse helped decrease that technology, said Digital TV Research's Murray. IPTV subscribers hit 12 million in 2014, but the research firm predicts they will fall to 6.26 million in 2023.
As for pay-TV, most providers' financial reports show a decline in these subscribers. In January 2018, for example, Verizon Communications' fiber-fed Fios unit lost 29,000 subscribers in the fourth quarter compared with gaining 21,000 subs in the prior-year period. (See Verizon Fios Slows Growth Pace.)
However, Verizon executives downplayed the industry-wide erosion of legacy pay-TV and pointed to the company's advances with Oath, which melds the former AOL and Yahoo digital businesses. Oath generated $2.2 billion in revenue in the fourth quarter, an approximately 10% increase from the prior three month period, which executives credited to "increased customer advertising spending during the holidays, [although it expects] a normal seasonal trend in Oath revenue" (or decline) in the first quarter of the new year, wrote Alan Breznick in Light Reading. (See Verizon: Video Down but Media Up.)
In the US, the top pay-TV provider last year was Comcast with almost 21.35 subscribers by the end of September 2017, Statista reported. DirecTV came in second, with 20.61 pay-TV subscribers, the research aggregator said.
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Consumers are buying millions of IoT devices, from smart thermostats and security systems to intelligent entertainment setups and furniture. Yet many of these devices remain isolated because home users are uncomfortable connecting them to each other – or even their WiFi. After all, their WiFi network was probably designed only to handle a few laptops, a gaming system and a couple of smartphones. Now, demand on the network is surging and even though you're delivering 100 Mbps to 1 Gbps, that doesn't necessarily mean the broadband power is in the right place or reaches every corner of a home.
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