COVID-19 Pandemic Accelerates Pay-TV Cord-Cutting in 2020

image
Economic downturn and streaming competition is driving cord-cutting in both mature and emerging markets
13 Oct 2020

Worldwide pay-TV market growth has slowed over the past few years due to the shift from video consumption to online streaming. The COVID-19 pandemic is further accelerating the cord cutting trend, resulting in higher pay-TV churn in many markets.  Global tech market advisory firm, ABI Research, forecasts that the worldwide pay-TV market will see a slight decline from 2019 to reach a 1.07 billion subscriber base in 2020.

“North American operators reported a loss of more than 2 million subscribers in the first quarter of 2020 alone.  Now, the Covid-19 pandemic is responsible for significant subscriber loss. One reason is that the cancellation of sports events due to the pandemic has caused many sports fans to cancel their pay-TV packages. To lower churn, operators are offering discounted of pay-TV packages or allowing customers to suspend the subscription until the sports events resume,” explains Khin Sandi Lynn, industry analyst at ABI Research.

Before the pandemic, cord-cutting centered mostly in mature markets, where broadband penetration is high. The economic impact of COVID-19 is driving cord-cutting in emerging markets too. Indian satellite TV operator Tata Sky lost 1.5 million subscribers in first half of 2020. Indian cable operators could not collect 80% of their subscription fees during the lockdowns as consumers struggled to pay their bills. Emerging markets such as Brazil, Colombia, and Thailand are experiencing similar conditions.

“In mature markets, cord-cutting could create an opportunity for streaming services since some cord-cutters may choose video streaming to replace pay-TV service. However, in emerging markets, low broadband penetration could be a barrier for many consumers to move to streaming,” comments Lynn.  To maintain a subscriber base, pay-TV service providers need to implement price adjustments, such as repackaging the services into smaller channel bundles or significantly increase promotions. Heavier subsidizing of Consumer Premise Equipment (CPE) may also help customers’ monthly fees burden in the short term. “However, a sudden spike in churn could also lead to content piracy. While implementing strategies to lower churn, service providers should also focus on content security measures,” she notes.

Although COVID-19 has dented the pay-TV market, the deep subscriber loss is likely to be temporary. When sports events resume, sports fans are likely to go back to pay-TV service. In emerging markets with limited broadband connectivity and limited choice of streaming services, traditional pay-TV services are likely to gain subscribers and remain strong beyond the pandemic.  ABI Research forecasts the pay-TV market to reach 1.1 billion subscribers in 2025.

These findings are from ABI Research’s Pay TV and Residential Broadband Subscriptions market data report. This report is part of the company’s Video and Cloud research service, which includes research, data, and ABI Insights. Market Data spreadsheets are composed of deep data, market share analysis, and highly segmented, service-specific forecasts to provide detailed insight where opportunities lie.

 

About ABI Research

ABI Research is a global technology intelligence firm uniquely positioned at the intersection of technology solution providers and end-market companies. We serve as the bridge that seamlessly connects these two segments by providing exclusive research and expert guidance to drive successful technology implementations and deliver strategies proven to attract and retain customers.

ABI Research 是一家全球性的技术情报公司,拥有得天独厚的优势,充当终端市场公司和技术解决方案提供商之间的桥梁,通过提供独家研究和专业性指导,推动成功的技术实施和提供经证明可吸引和留住客户的战略,无缝连接这两大主体。

For more information about ABI Research’s services, contact us at +1.516.624.2500 in the Americas, +44.203.326.0140 in Europe, +65.6592.0290 in Asia-Pacific, or visit www.abiresearch.com.

Contact ABI Research

Media Contacts

Americas: +1.516.624.2542
Europe: +44.(0).203.326.0142
Asia: +65 6950.5670

Related Research

Related Service