Telecoms are well-positioned to grab the majority of new customers
Monterey, CA (Vocus) October 9, 2009
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.
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