Wednesday, February 20, 2013

Going Down

When everyone has TV and everyone has mobile phone, you wonder at the constant figures that show every provider is adding new subscribers the whole time (most actually publish new subscribers and omit their lost customers - a term called 'churn').

But the numbers are being reversed. According to Informa, there are 800,000 fewer pay TV subscribers than a year ago.

The number of pay TV subs went down in France, Germany, Italy, Spain, with just the UK bucking the trend with the high profile three way battle between BSkyB, Virgin Media and the Freeview/YouView camp set to intensify. Still, you wonder how hard times really are in the UK if an additional 190,000 people were able to afford paid for telly where there are perfectly good free options (Freeview just today issues a press release pointing out that 95% of the top telly programmes are available for free in the UK).

Meanwhile, Italy was by far hardest hit as IPTV services Fastweb and Wind closed and Sky Italia shed subscribers. Spain was the next hardest hit and lost 261,000 pay subs. Germany was down 180,000 and France just edged into negative territory, with subs down 3,000. Overall, the number of pay TV subs fell by 800,000 year-on-year in 2012 in Western Europe, mirroring similar declines in the recent past in the US.

My take is that this is a real tipping point for the TV industry. New players such as Netflix and YouTube are fast filling the vaccum and are appealing to different audiences (the young and the time poor) and a cost of under £10 a month.

Sport, of course, remains the one remaining differentiation point and the prices paid for top sports rights have become polemic. But even here Formula 1 is reporting falling viewing figures.

What goes up has to come down, as they say.