According to Rethink Technology Research's Rethink TV service, direct-to-home (DTH) satellite TV subscriber losses will accelerate and spread from North America to Europe and eventually to the Far East. Where subscriber numbers rise, declines in ARPU are expected. The research house expects the global DTH video industry to shed billions of dollars in revenue by 2024.
Rethink Technology Research believes the decline in DTH will turn out to be terminal. The decline began with U.S. satellite operators and is now gathering speed and starting to spread to Europe, leaving operators scrambling to mop up their departing customers via the life rafts of low ARPU OTT.
The subscriber exodus makes it impossible to maintain existing high ARPUs. The wheels have just come off for AT&T in the United States as DirecTV Now, its stand-alone OTT service, is seen as an alternative to the main DTH service. Both have been losing subs after initial gains, and investors are starting to ask if the trend is permanent.
However, DTH continues to thrive where there are no competitive alternatives for premium content, or where one operator has the most sought-after sports rights. In some parts of the world, DTH continues to provide an engine of growth for pay TV, but only in developing markets - notably India - and only for a short while longer, Rethink says.
In Latin America, with its artificially high pay TV ARPU, sustaining ARPU is expected to be a challenge. DTH saw rapid growth in pay TV until 2014 in Latin America, on the back of an expanding middle class in key markets. Rethink believes the region is set for a period of decline and falling ARPU as OTT services continue to take off there and provide a direct threat.
In Europe, the picture is more mixed, with the decline well advanced for some operators such as France's Canal+, whose base is expected to be halved by 2024 from 2018. Some eastern European markets have profiles more like developing countries, most notably Cyfrowy Polsat in Poland, set to continue gaining subs for at least the next few years. However, even these operators are expected to run out of rope towards the end of the forecast.
In Asia Pacific, DTH subscriber growth is expected to be sustained throughout the period, but with signs of flattening later around 2024. Rethink anticipates some APAC operators that are still growing subs now will reach a turning point during the forecast period with decline setting in just before 2024.
Global DTH numbers are still rising now, but this is expected to end during 2020 and move on to an accelerating decline as more and more DTH operators in Asia Pacific pass their summit.