Distressing Times for Cable MSOs - Analyst Blog
December 30 2013 - 1:50PM
Zacks
Infonetics Research Inc. recently
reported that the cable MSOs (multi service operators) are
gradually losing hold in the pay-TV market globally. Internal
dynamics of the pay-TV market is slowly shifting toward fiber-based
video offerings of large telecom and satellite TV operators. Video
offering is the core business area of the cable TV operators, which
is slipping out of their hands.
Despite a progressing global pay-TV
market, the situation is distressing for the cable TV operators.
According to Infonetics, video service revenues in the first half
of 2013 were approximately $110 billion globally, up 2% from the
corresponding period of the previous year.
However, cable TV operators’
revenue market share declined 1% in the same period and the cable
MSOs are losing subscribers at a rate of 1.5%-2.5%. Infonetics
further estimated that the global pay-TV market size may reach up
to $270 billion by 2017.
In the U.S., telecom giants
Verizon Communications Inc. (VZ) and
AT&T Inc. (T) and satellite TV operators
DIRECTV (DTV) and DISH Network
Corp. (DISH) are doing quite well with their video
offerings. Improved user interface, multi screen video offerings,
HD DVR services have helped these companies gain subscribers while
raising the price of their services.
This resulted in higher average
revenue per user with higher number of customers, improving the
overall financials of these companies. Outside the U.S., telecom
IPTV operators such as Deutsch Telekom and China Telecom are also
performing impressively with their video offerings.
In order to counter the loss of
video offerings to telecom operators, cable MSOs have decided to
focus on the small and medium sized business (SMB) segment, which
is one of the core areas of telecom operators. Various industry
researches estimate that the SMB segment is expected to offer a $20
to $30 billion market opportunity.
DISH NETWORK CP (DISH): Free Stock Analysis Report
DIRECTV (DTV): Free Stock Analysis Report
AT&T INC (T): Free Stock Analysis Report
VERIZON COMM (VZ): Free Stock Analysis Report
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