Increased competition from cable and internet-based TV providers will slow growth
Los Angeles, CA (PRWEB) February 19, 2013
Over the past five years, the Satellite TV Providers industry has benefitted from increasing subscriber numbers and a higher proportion of subscribers receiving more expensive programming packages. Consequently, revenue is expected to grow at an annualized rate of 4.8% to $2.8 billion over the five years to 2013. “The industry is highly concentrated, with two national satellite TV providers – Bell Canada and Shaw Communications – dominating the market,” says IBISWorld industry analyst Kevin Boyland. These firms have taken steps to improve their service quality and range of programming by upgrading their satellite networks; Bell launched a new satellite in 2012 and Shaw is expected to launch a new satellite in 2013.
The industry has benefitted from increasing consumer adoption of premium programming packages, which provide the broadest range of specialty channels and HD programming. According to Boyland, “These packages are more expensive than standard programming packages and, thus, have boosted industry revenue.” Average industry profitability has increased as well because, once the fixed costs of building, insuring and launching a satellite have been spread across a sizeable subscriber base, profit increases with each additional subscriber added. Revenue is expected to grow 2.2% in 2013 as more subscribers are added and more existing subscribers upgrade to premium services; average industry profit, defined as earnings before interest and taxes, is estimated to be about 7.3% of revenue through 2013.
The Satellite TV Providers industry exhibits a high level of concentration, with the two largest companies controlling about 90.0% of the market. Concentration is high in line with the extremely capital intensive nature of developing, launching and maintaining satellites. The industry's major players are diversified telecommunications operators that offer a range of services and have extensive financial resources at their disposal. Smaller players with fewer resources are naturally precluded from entering the industry due to the high capital costs of satellite development, launches and licences. IBISWorld estimates that the remaining 10.0% of the market is highly fragmented and divided among satellite TV resellers (e.g. TELUS) and an array of rural multipoint distributions system operators.
Over the five years to 2018, revenue is forecast to grow. The industry is anticipated to continue adding subscribers, albeit at a slower rate. Net subscriber additions are expected to decrease over the period amid intense competition from established cable providers as well as emerging internet-protocol television (IPTV) providers. IPTV providers are aggressively expanding their network's coverage in major metropolitan areas, increasing competition in these markets. IPTV benefits from the fact that it uses existing packet-switched networks and can be easily bundled with other services that use the same networks such as home phone and internet access services. Notably, both Bell and Shaw offer an IPTV service in addition to their satellite TV service. Internal competition is also set to increase with the entrance of a new satellite TV provider, BluSky HDTV. The firm is expected to launch service sometime in 2013.
For more information, visit IBISWorld’s Satellite TV Providers in Canada industry report page.
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IBISWorld industry Report Key Topics
This industry includes individuals and businesses that primarily act as agents or brokers in selling annuities and insurance policies. Industry participants earn commission income, mostly as a percentage of the premium of insurance policies sold. They also earn some fee income for providing risk management consulting and other value-added services.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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