Television distribution
The television distribution market consists of revenues generated by distributors of television programming to viewers. It includes spending by consumers on subscriptions to basic and premium channels accessed from cable operators, satellite providers, telephone companies, and other multichannel distributors and on video-on-demand (VOD). In the United States, EMEA (Europe, Middle East, Africa), and Canada it also includes pay-per-view. VOD operates through a server and enables viewers to access a program at any time. Pay-per-view uses dedicated channels to show films at scheduled intervals. In Asia Pacific, the market also includes television programming distributed to mobile phones. We do not include mobile phone distribution in other regions where it has been introduced, because the business models are in flux and it is not yet clear whether other regions’ markets will evolve on a subscription basis or an advertiser-supported basis through which viewers get free access to content. In Asia Pacific, wireless phones are well established as entertainment media, and the introduction of wireless broadcast technologies is facilitating a rapid take-up in subscription-based television services. In the United States and Canada, advertising sold by television distributors such as television stations and cable system operators is also included.
Market size and growth by region
We project the global television distribution market will increase from US$160.6 billion in 2006 to US$250.7 billion in 2011, a compound annual growth rate of 9.3 percent during the five-year forecast period. Asia Pacific, Latin America, and EMEA will average double-digit annual increases—18.1 percent, 14.5 percent, and 12.3 percent, respectively—while mid-single-digit growth is projected for Canada (5.7 percent) and the United States (5.4 percent).
Principal drivers
The entrance of telephone companies into the TV distribution market will increase competition and fuel subscriber growth. Cable operators are migrating their subscribers from analog to digital so as to more efficiently use bandwidth to offer more services and increase revenue per user. Growth in digital terrestrial services (provided by cable and telephone companies) will also fuel growth in video-on-demand. Analog broadcast shutdowns in EMEA and the United States will stimulate the subscription market. Subscription household penetration growth will drive subscription spending in Latin America, EMEA, and Asia Pacific, but the United States and Canada, where penetration is already approaching the 90 percent level, have less room to expand. In Asia Pacific, mobile television will expand rapidly and become a significant component of the market.
A sampling of global facts and forecasts:
- "The US television distribution market is expected to grow from US$94.6 billion in 2006 to US$123.3 billion in 2010, at a 5.4 percent CAGR."
- "In Europe, Middle East, Africa (EMEA), digital cable, expanded capacity, new launches, increased competition, and carriage of pay channels on free platforms will enhance demand for premium services."
- "In Asia Pacific, mobile television will expand rapidly and become a significant component of the market."
- "In Latin America, attractive pricing and rising incomes will stimulate subscriber growth and fuel subscription spending."
- "In Canada, digital cable and telephone company subscriber growth will expand the video-on-demand market."
