UK pay TV operators must look to new services as revenue growth slows

UK pay TV revenues are fast reaching maturity, so operators must find other revenue streams to ensure growth, according to new research.

Pay TV revenues will reach US$9.3 billion (€6.5 billion) this year, up US$3.3 billion from 2006, according to Digital TV Research. However, the rate of growth will slow and the total will only grow US$250 million between 2011 and 2016, taking the total to US$9.6 billion. ARPU from TV services will fall over the next five years, forcing operators to look to new revenue streams.

“Digital TV penetration has almost reached saturation point as it exceeds 95%,” report author Simon Murray noted. “Free-to-air services are responsible for much of the recent digital TV growth. Digital pay TV penetration is not expected to climb much and will remain below 58% of TV households.”

Sky’s growth will be muted in the next five years, Digital TV Research said. The 10 million UK DTH subs mark will be breached in 2012. As the company increases ARPU by offering more services, DTH revenues are forecast to reach US$7.8 billion in 2016, up from US$7.27 billion in 2010. Meanwhile, cable TV revenues peaked in 2010, at US$1.69 billion, according to the research company.