Pay TV Will Take Lion’s Share of Video Spend Through 2022
For the past few years, the debate has been raging about whether the cable industry will be able to survive the large number of cord cutters who are severing their cable connections in favor of over-the-top (OTT) video services.
Here at GLDS, we have been encouraging our customers to remain optimistic about cord cutting. On one hand, it’s important to respect the threat of OTT service providers, and to take their services seriously. But there is no indication that cord cutting will lead to the cable apocalypse as some have suggested.
In fact, according to one new study from Strategy Analytics, pay TV providers will actually take in the majority of consumer TV and video revenue through 2022. In fact, legacy providers will control more than 80 percent of the total subscription video market by then.
“Beware those headlines suggesting Netflix is now bigger than the cable industry,” stated Strategy Analytics analyst David Mercer, who is most likely referring to a recent statistic that Netflix now has more subscribers than the cable industry. “The OTT players have had a remarkable impact on the video landscape and will continue to shake things up, but there is a long way to go before the winners can be announced. Video providers will improve their chances of succeeding in this complex new environment if they focus on identifying consumer needs and desired experiences, evaluating their existing products and service offers, and monitoring their market performance.”
The firm indicates U.S. subscription video and TV service revenues will peak in 2019 at $130.3 billion before declining to $125.7 billion by 2022.