TV Service Providers - UK - October 2013
“Whilst the pay TV sector is in a healthy position, providers will be under greater pressure to stay ahead of subscription-free products and services. Although pay TV providers have so far seen off much of the threat from free-view-view platforms, smart TVs and wireless streaming services will arguably present an even greater challenge in years to come. As these devices reach more people, consumers will start to expect a strong on-demand platform as standard, which could put a cap on the premium that companies can charge for TV subscriptions”.
– Paul Davies, Senior Technology Analyst
Some questions answered in this report include:
- Will the improvement of subscription-free services limit the value of pay TV?
- How can BT use sport to win customers from its rivals?
- How can providers retain consumers beyond initial contracts?
- Are free-to-view services set to decline beyond 2013?
The number of homes relying solely on free-to-view services declined for the first time in over five years in 2013, as pay TV providers have encouraged more Freeview users to upgrade from the ‘default’ platform.
Whilst Sky has added a small number of new subscribers in 2013, lower-cost ADSL providers such as TalkTalk have driven most volume, as the on-demand focused YouView box has helped TalkTalk to prompt upgrades. The introduction of BT Sport has also presented the market leader with a new challenge, with Sky losing some its hold over exclusive live sport in the pay TV sector.
This report investigates current pay TV subscription levels amongst consumers, whilst also assessing the reach of subscription-free services. Consumer uptake and interest in BT’s new sports channels is also measured, whilst we look at attitudes amongst existing pay TV subscribers.
Finally the report analyses the ways in which pay TV providers may be able to encourage non-subscribers to upgrade from free-to-view platforms.
The TV service market refers to providers of digital TV, including both non-subscription services (eg Freeview, Freesat and YouView) and pay TV providers, such as BSkyB, Virgin Media, BT and TalkTalk.
Pay TV providers tend to offer broadband and landline services alongside a TV package, but consumers are not obliged to take up a ‘triple-play’ bundle (that includes all three), except in the case of BT and TalkTalk (ADSL providers) where the TV service is sent down the line. Other providers tend to broadcast content over the air (eg Freeview), via cable (eg Virgin Media) or satellite dish (eg Sky).
BT Vision was renamed BT TV (to reflect its BT Vision and BT YouView boxes) in August 2013. Consumer research for this report was carried out prior to this change; therefore the company name is sometimes displayed as ‘BT Vision’ when referring to the consumer research.
For the purposes of this report, paid online streaming services (such as LOVEFiLM and NOW TV) represent an alternative way of receiving content, and are therefore not included within the market size data.
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