Updated Projections from SNL Kagan Indicate a Continued Battle for Multichannel Market Share

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Telecoms are expected to gain the majority of new subscribers but will still hold a smaller piece of the pie compared to cable and satellite providers.

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Telecoms are well-positioned to grab the majority of new customers

According to updated projections from SNL Kagan, U.S. multichannel video services are faced with increasing competition for limited market share gains over the next ten years, as total TV households are only expected to grow at a 1.3% CAGR and total multichannel subscribers are projected to grow at an even slower rate of 1.0%.

As a result, SNL Kagan forecasts multichannel penetration of TV households declining from 84.4% as of year-end 2008 to 83.3% by 2019. Over-the-top video substitution is expected to fuel the erosion in multichannel penetration rates over the long-term outlook. Though operators are downplaying the impact of online video on multichannel subscriptions, the early adoption trends suggest a growing stature for over-the-top substitution that SNL Kagan forecasts will account for 7.1 million homes by 2013 and more than twice that number in the 10-year outlook.

According to SNL Kagan's projections, cable TV will likely experience the greatest losses, dropping from 63.2 million subscribers in 2009 to 60.7 million in 2019. DBS consumer growth is expected to remain strong over the next few years, growing from 32.2 million in 2009 to 33.6 million in 2013, but will begin to erode later, falling to 33.0 million in 2019.The telecom industry is expected to be the only one to significantly grow its subscriber base in the 10-year outlook - from 5.7 million to 16.7 million.

"Telecoms are well-positioned to grab the majority of new customers," said SNL Kagan analyst Mari Rondeli. "However, telco's limited footprint - only 24% of total telco homes passed - means cable and DBS will easily maintain the greater portion of the pie. We expect telco video services will be available to 77.8 million households in 10 years, but that still leaves about 54 million without a facilities-based video product."

These projections were published in SNL Kagan's Multichannel Market Trends feature and are available via the SNL Kagan Unlimited Information Service. For more information on SNL Kagan Unlimited, contact Sales at 866.296.3743; SNLKaganSales (at) snl (dot) com.

About SNL Kagan

SNL Kagan, a division of SNL Financial LC, is a comprehensive resource for financial intelligence in the media and communications sector, including the broadcasting, cable, entertainment, motion picture, telecom, wireless, satellite, publishing and new media industries. The SNL Kagan suite of products integrates breaking news, comprehensive data and expert analysis into an electronic database available online and updated around the clock. For more information, visit http://www.snlkagan.com.

About Kagan Media Appraisals

Kagan Media Appraisals, the consulting arm of SNL Kagan, offers custom studies, white papers, briefings, business plans, research reports and appraisals from SNL Kagan's team of expert analysts. KMA is recognized industry-wide for actionable advisories, expert opinions, best practices, regulatory assessments and market data. Contact KaganConsulting (at) snl (dot) com or 831.624.1536 for more information.

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