Western European Pay-TV Revenue To Rise 23% By 2006
The pay-TV sector in Western Europe was worth almost â‚Ź20 billion in 2003 and is expected to grow by 23% to â‚Ź24 billion by 2006, according to a report from Screen Digest.
The mean monthly average revenue per user (ARPU) in Western Europe was â‚Ź21.70 (£14.69) and this is predicted to rise to â‚Ź24.90 by the end of 2006. The UK’s BSkyB this week announced an annual ARPU of £369. This equates to £30.75 per month and demonstrates the extent to which Sky is currently outperforming many of its competitors (see BSkyB’s Good Run Continues With H1 Results).
Screen Digest says that the ARPU figures highlight the difficulties that pay-TV operators in continental Europe have in persuading their customers to upgrade to more expensive premium TV packages. A low-cost multi-channel TV mentality pervades in many markets – particularly in Germany and the Benelux countries.
Balance of power shifts further towards satellite Recent market consolidation in Western Europe’s pay-TV industry has further shifted the balance of power from cable towards satellite operators, says the report. By 2006 revenue from direct-to-home satellite (DTH), at â‚Ź11.4 billion, will almost equal that generated by cable, at â‚Ź12.1 billion, despite the fact that there are more than twice as many cable subscribers.
“So the money and the power lies in the hands of European satellite operators. Cable groups’ attempts to mimic satellite’s premium TV business model have to date failed. Even in 2006, the majority of European cable TV subscribers will be receiving analogue signals – analogue satellite ceased to exist during 2002,” notes Screen Digest.
The development of pay-per-view (PPV) Over the next three years PPV revenues will grow at a much faster rate than traditional premium TV revenues. At year end 2003, total PPV revenues (both movies and sports) were â‚Ź713 million – accounting for 3.6% of total pay-TV revenues. By 2006, they will reach â‚Ź1.5 billion – accounting for 5.7% of total pay TV revenues.
Guy Bisson, co-author of the report, says: “Although pay-TV operators in many western European markets have reached a plateau in terms of subscriber growth, fledgling PPV services are finally delivering on their promise – delivering incremental revenue and providing a much needed boost to ARPUs.”