Monday January 5, 2009 - Antonette Goroch
Pay TV has traditionally been a recession proof industry, steadily growing through the economic turmoil seen in both the late eighties and the early nineties. But competition is set to be far more fierce in US digital pay TV during 2009 than in previous recessions, and this new climate may bring some unlikely beneficiaries.
Despite economic downturn, digital pay TV subscriptions are not likely to stop growing during 2009, particularly in light of the digital broadcast transition in February. In this atmosphere, though, consumers will be keen on finding the best value in their spending decisions—even in pay TV. Consequently, bundled services will become more attractive than ever—offering both added financial value to consumers in multiple services, as well as the perceived value of savings through one bill.
Ironically, telcos, the newest and smallest of the U.S. pay TV pipelines, may be the best suited for offering the most advanced package of bundled services. While not yet widely deployed compared to their DTH satellite and digital cable competitors, both AT&T and Verizon have the ability to offer the coveted “quad play” of mobile/phone/broadband/advanced TV—indeed Verizon began offering such services earlier this year in certain markets. Additionally, their IP based architecture adds to their ability to offer new cross-platform and “over the top” content.
FiosTV by Verizon and U-Verse from AT&T both hit important milestones this year, reaching 1.4 mil and 1 mil subscribers during December, respectively, signifying they are in this game for the long haul. Equally significant, both are aggressively rolling out pay TV in major markets. This will pose a clear challenge to incumbent cable and DTH satellite providers, as the major telco/IPTV operators attempt to cherry-pick the most high-ARPU subscribers through advanced bundles of HDTV, broadband, mobile and mobile TV, and may foreshadow rapid growth—despite economic slowdown--for this new generation of IPTV service.
Source: DTC
