Western Europe pay TV subs up, revenues down

Western European pay TV will gain subscribers between 2017 and 2023. Although this only represents a 2.6% increase, the Western Europe Pay TV Forecasts report estimates nearly 3 million more subs to take the total to 106 million.

Simon Murray, Principal Analyst at Digital TV Research, said: “Much of the pay TV subscriber growth will come from countries with traditionally low pay TV penetration. More than half of the region’s next additions will come from Italy [up by 960,000 between 2017 and 2023] and Spain [up by 716,000]. Germany will add 913,000 subscribers.”

Murray continued: “However, subscriber numbers will fall for six of the 18 countries covered in the report. The UK will be the worst affected, although it will only lose 234,000 subs between 2017 and 2023.”

IPTV is gaining share at the expense of the other pay TV platforms; having overtaken satellite TV in 2015. IPTV will add 8 million subscribers between 2017 and 2023 but pay satellite TV will lose more than 2 million.

Some telcos (especially Telefonica in Spain and Canal Plus in France) are actively moving their satellite TV subs to more lucrative broadband bundles. Spain and France will both lose 1 million pay satellite TV subs between 2017 and 2023. Sky will soon offer its full satellite TV line-up online. Some satellite TV subs are expected to convert to the online platform; resulting in 691,000 fewer pay satellite TV subs in the UK between 2017 and 2023.

Despite subscriptions increasing, pay TV revenues will fall – by $2.11 billion between 2017 and 2023 to $27.27 billion.

Revenues will fall in all but three of the 18 countries covered in the report. The UK will lose $628 million over this period, although it will remain the most lucrative pay TV market by 2023. Regardless of having the most pay TV subs by some distance, Germany’s pay TV revenues will remain a lot lower than the UK – at $3.61 billion by 2023. Italy will overtake Germany in 2023.

Satellite TV will remain the highest-earning pay TV platform, but its revenues will fall every year from 2011 – and will decline by $2 billion between 2017 and 2023. Mirroring its subscriber increases, IPTV revenues will climb by 16% between 2017 and 2023 to $6.43 billion – or up by $883 million. Cable TV revenues peaked in 2010. Cable TV will lose $866 million between 2017 and 2023.

Western Europe’s top three operators will account for 39% of the region’s pay TV subscribers by 2023. The same companies will take 50% of pay TV revenues.

Western Europe pay TV revenues by platform ($ million) 35,000

30,000 891 589 53 25,000 8,675 8,926 8,647 20,000 5,546 5,870 15,000 6,429 1,662 1,658 1,516 10,000 12,610 5,000 12,234 10,630

0 2017 2018 2023

Satellite TV Pay DTT IPTV Digital cable TV Analog cable TV

Source: Digital TV Research Ltd has been the largest international pay TV operator in Europe for some time. However, Sky is closing the gap. By 2023, Liberty Global will have 17.89 million subscribers (including all of ) compared with Sky’s 14.86 million (satellite TV only). Third-placed Vodafone will have 8.85 million subscribers (excluding the Netherlands’ Ziggo). Vodafone may acquire at least some of Liberty Global’s European assets.

Sky will remain the pay TV revenue leader by some distance, with $8.49 billion from its satellite TV operations in 2023. Liberty Global will contribute a further $3.91 billion and Vodafone $1.21 billion.

Western Europe Pay TV Forecasts

Table of Contents

Published in March 2018, this 218-page PDF and excel report comes in six parts:

• Executive summary and regional forecasts, with handy comparison tables to reveal the best growth prospects; • Regional forecasts summary from 2010 to 2023 by platform, by household penetration, by pay TV subscribers and by pay TV revenues; • Major pay TV operators; • Country profiles and analysis for 18 territories; • Detailed forecasts for 18 countries, including 79 operators. • NEW FOR 2018: Prospects. Summary subscriber forecasts for 18 countries in a graphically appealing 39-page document.

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If you do not want the full report, you can buy the Western Europe Pay TV Prospects report for half the price of the full report. Please contact [email protected] for more details, including the table of contents and sample pages.

Forecasts for the following 18 countries and 79 operators:

Country No of ops Operators

Austria 4 Telekom Austria; UPC; Sky; Liwest Belgium 5 Proximus; SFR; ; VOO; Telesat/TV Vlaanderen

Denmark 6 ; Viasat; You See; Stofa; Boxer; TDC Finland 5 Elisa; Telia; DNA; Canal Digital; Viasat France 7 Orange; SFR; CanalSat; Altice; Free; Bouygues; TNT Germany 8 Kabel Deutschland; Vodafone; DT/T-Home; Sky; Unitymedia; Telecolumbus; HD+; Freenet Iceland 2 Vodafone, Siminn

Ireland 3 Virgin; Sky;

Italy 3 Mediaset; Sky; Telecom Italia Luxembourg 2 Tele des P&T; Eltrona Malta 2 Melita; Go

Netherlands 5 UPC/Ziggo; ; Tele 2; KPN/

Norway 5 Canal Digital; Viasat; Riks TV; ; Get Portugal 4 Meo/PT; NOS/Zon; /Cabovisao; Vodafone Spain 5 Ono/Vodafone; Canal Plus/Telefonica/Movistar; Euskatel; Orange; Telecable Sweden 6 Canal Digital; Viasat; ; Telia; Boxer; Telenor Switzerland 3 ; UPC/Cablecom; Sunrise

UK 4 Sky; Virgin; BT; TalkTalk

SAMPLE: Denmark pay TV insight

• Pay TV penetration already runs at 91% - so it will not grow. Pay TV penetration shot up in 2011 as public broadcaster TV2 moved from the FTA DTT to the pay DTT option. However, pay DTT is forecast to fall. Competition will intensify, leading to lower TV ARPU figures and falling pay TV revenues from 2015 onwards.

Main assumptions behind the forecasts • Pay TV penetration is already high. • Little movement is expected between platforms, although IPTV will see some growth and cable and satellite TV will fall. • Market maturity will lead to lower ARPUs • The local currency strengthened against the USD in 2017. Source: Digital TV Research

• Full digital TV conversion was achieved in 2017. Cable TV penetration is at 56% of homes, down from 67% in 2010. IPTV will continue to grow – to more than a fifth of TV households. Pay satellite TV will continue to experience falling subs numbers as homes convert to cheaper options and bundles on other platforms, with pay DTT also falling.

• Denmark has 1.41 million cable households, although saturation point has been reached. Leading operators TDC’s YouSee and Stofa together control about 90% of cable subs.

• Stofa’s cable subscription growth has been marginal in recent years. The company has about 329,000 subs, of which half are counted via third-party local operators (mostly 300 housing associations). We do not expect any TV subscriber growth. Digital subs pay DKK229-549/month ($35.73-85.65) for 27- 61 channels. Stofa also offers SVOD platforms C More and Viasat Film. About 200,000 subs also take broadband services.

• In October 2012, co-operative Syd Energi bought Stofa from Sweden’s Ratos for DKK1,900 million. In early 2015, Stofa took a 25% stake in broadband provider Waoo!

• TDC had 1.30 million basic cable TV subs at end-2017; down year-on-year. TDC’s cable (YouSee) and IPTV interests accounted for 56% of Denmark’s pay TV subscribers at end-2017. TDC TV controls about two-thirds of the IPTV market; with 312,000 subscribers at end-2017, with 353,000 expected by 2023.

TDC TV and YouSee operational highlights 2010 2011 2012 2013 2014 2015 2016 2017 TDC TV subs (000) 128 152 190 218 258 277 297 YouSee TV subs (000) 1,179 1,192 1,166 1,152 1,099 1,082 Total TV subs (000) 1,392 1,393 1,420 1,377 1,379 1,299 TDC TV ARPU (DKK) 335 333 308 323 315 305 YouSee TV ARPU (DKK) 214 226 234 234 242 TV ARPU (DKK) 254 256 258 Source: TDC

• The company introduced a 300Mbps broadband service in January 2015. Mobile services were added in January 2013. The HBO SVOD platform is also available.

• The company launched quad-play services in 2011 across its HFC network that covers 1.5 million premises. By 2018, TDC wants to be able to offer 50% of households 1,000Mbps, 70% 100Mbps and 100% 10Mbps. TDC had 1.90 million mobile subs and 1.03 million residential broadband ones by end-2017.

• In February 2018, TDC received a takeover bid from Macquarie and some pension funds. This bid came days after TDC acquired MTG’s Nordic entertainment assets for €2 billion. The bid for MTG’s assets was dropped following the Macquarie bid.

Viasat Nordic pay TV operations (000) 2010 2011 2012 2013 2014 2015 2016 2017 Denmark 106 104 98 92 86 84 75 66 Finland 46 45 42 40 36 34 31 27 Norway 159 153 131 118 111 108 97 86 Sweden 352 336 321 309 293 282 253 223 Premium satellite TV 663 638 592 559 526 508 456 402 subs of which ViasatPlus 158 188 192 of which multiroom 235 250 250 235 of which HD 210 297 341 358 Basic satellite TV subs 43 38 46 40 33 18 Wholesale cable & 394 421 427 418 456 506 544 529 IPTV subs Annualized ARPU 4,555 4,791 4,988 5,075 5,254 5,161 5,508 5,500 (SEK) Source: Modern Times Group. Country-by-country estimates by Digital TV Research

• Viasat Nordic lost 54,000 premium pay satellite TV subscribers across Sweden, Denmark, Norway and Finland in 2017. The platform has lost 261,000 subs since 2010. On the plus side, Viasat is gaining ARPU.

• The company does not break down subscriber figures by country, but we estimate that about 66,000 subs were in Denmark at end-2017 – nearly the same as Canal Digital. This total will fall to 61,000 by 2023.

• In October 2013, MTG renewed a deal with UEFA to screen Champions League soccer in Sweden, Denmark and Norway from the 2015/16 season to the 2017/2018 season. The rights were renewed until 2020/21. In October 2015, Viasat also signed up the rights to English Premier League soccer for a further three seasons from 2016/17 in Sweden, Finland and Denmark.

• Viasat and Canal Digital compete for Scandinavian pay satellite TV subs, together recording 5.5% penetration in Denmark at end-2017 (down from 8.7% in 2010). However, pay satellite TV subscriber numbers are falling as households opt for the less expensive alternatives on offer.

Canal Digital subscribers by country (000) 2011 2012 2013 2014 2015 2016 2017 Norway 499 489 481 468 456 438 426 Sweden 310 307 308 310 310 297 289 Finland 49 50 52 53 55 53 52 Denmark 108 98 88 81 77 74 72 Total 96 5 945 929 912 897 862 838 ARPU (NOK) 354 373 377 389 382 410 Source: Canal Digital. Note: 2016 & 2017 country estimates by Digital TV Research

• Telenor-owned Canal Digital had 838,000 premium satellite TV subscribers across the region by end-2017, down by 127,000 since end-2011. Danish subscriber numbers are falling. Canal Digital has lost subscribers across the region since 2008 due to greater competition and the loss of English Premier League soccer rights.

Fixed IPTV subs by operator 2010 2011 2012 2013 2014 Jun 15 TDC 121,791 155,931 194,153 228,317 268,727 282,288 EnergiMidt 15,907 21,960 29,462 28,390 30,174 30,925 Fibia 28,784 27,242 SE 0 14,906 19,647 18,633 SEAS NVE 18,885 Dansk Bredband 20,997 14,171 Waoo 9,884 13,469 TRE-FOR 7,829 Others 41,362 45,043 77,931 64,980 75,174 80,390 Total 217,770 265,480 321,193 359,771 402,859 420,845 Source: ENS

• ENS estimated 420,845 IPTV subscribers at June 2015. IPTV had 18.9% TV household penetration at end-2017, with 20.9% expected by 2023. Erhversstyrelsen estimated 2,392,000 fixed broadband subs by June 2015.

Telia subscriber growth (000) 2010 2011 2012 2013 2014 2015 2016 2017 Sweden broadband 1,129 1,149 1,175 1,208 1,275 1,306 1,299 1,286 Sweden TV 450 515 580 641 697 730 765 787 Sweden TV ARPU 156 159 161 167 185 191 SEK Finland broadband 476 491 501 532 561 527 497 464 Finland TV 218 355 403 436 481 486 489 481 Finland TV ARPU € 8.70 8.90 8.80 9.00 9.60 9.40 Norway broadband 195 188 184 0 0 0 0 0 Norway TV 6 7 12 0 0 0 0 0 Denmark bband 67 80 87 99 114 135 128 114 Denmark TV 5 10 14 18 20 28 28 31 Denmark TV ARPU 322 345 392 376 348 342 DKK Source: Telia

• Telia had 31,000 IPTV subscribers in Denmark by end-2017. Telia began offering a la carte channel selection in late 2013.

• In November 2009, Boxer expanded its pay DTT offer when three MPEG-4 multiplexes were added. Boxer now provides up to 29 pay channels (DKK80- 519/month, $12.48-80.97) and the FTA ones. Boxer added HD channels in April 2012 by converting one of its multiplexes to DVB-T2. A la carte channel offers started in early 2014.

• Its parent company reported 280,000 Danish subscribers by late 2016, down from 335,000 in 2013. We believe that this total will continue to fall; reaching 245,000 by 2023. In December 2016, SE, owner of cable operator Stofa, acquired Boxer from Sweden’s Teracom.

• Analog switch-off was completed in November 2009. About 1.6 million homes have a DTT settop box, although most use them for secondary sets. A little less than a fifth of homes are considered primary DTT. The public service broadcasters operate two multiplexes, which trade as Digi-TV and offer eight FTA national channels.

Denmark pay TV forecasts

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Households (000) TV households (000) Digital cable subs (000) Analog cable subs (000) Pay IPTV subscribers (000) Pay digital Satellite TV subs (000) Digital Satellite TV HH (000) Analog Satellite TV HH (000) Analog terrestrial households (000) Primary FTA DTT households (000) Primary Pay DTT households (000)

Digital homes (000) Analog homes (000) Pay TV subscribers (000) Total DTT homes (000)

Digital cable subs/TV HH Analog cable subs/TV HH Pay IPTV subs/TV HH Pay Satellite TV/TV HH Digital free Satellite TV/TV HH Analog Satellite TV/TV HH Analog terrestrial/TVHH Primary FTA DTT/TV HH Primary pay DTT/TV HH

TVHH/Total HH Digital/TV HH Analog/TV HH Pay TV Subs/TV HH Total DTT homes/TVHH

Stand-alone digital cable subs (000) Double-play digital cable subs (000) Triple-play digital cable subs (000)

Stand-alone pay IPTV subs (000) Double-play pay IPTV subs (000) Triple-play pay IPTV subs (000)

Denmark pay TV forecasts

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Revenues (US$ million) Stand-alone digital cable revs Double-play dig cable TV revs Triple-play digital cable TV revs Digital cable TV subs revenues Digital cable TV on-demand revs Digital cable TV revenues Analog cable TV subs revs Cable TV revenues

Stand-alone IPTV revenues Double-play IPTV revenues Triple-play IPTV revenues IPTV subscription revenues IPTV on-demand revenues IPTV revenues

Satellite TV subscription revs Satellite TV on-demand revs Satellite TV revenues

DTT subscription revs DTT on-demand revenues DTT revenues

Subscription revenues On-demand revenues Total revenues

Average Revenue Per User (ARPU - US$) Stand-alone digital cable subs Double-play dig cable TV subs Triple-play digital cable TV subs Ave digital cable (subs & VOD) Analog cable TV subs Stand-alone IPTV subs Double-play IPTV subs Triple-play IPTV subs Average IPTV (subs and VOD) Pay Satellite TV (subs) Pay Satellite TV (subs and PPV) Pay DTT (subs) Pay DTT (subs and PPV) Average monthly ARPU

Denmark pay TV forecasts

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Pay TV subscribers by operator (000) Stofa (digital cable) Stofa (analog cable) Stofa (total) You See (digital cable) You See (analog cable) You See (total) TDC (IPTV) Canal Digital (satellite) Viasat (satellite) Boxer (DTT) Others

Share of pay TV subscribers by operator % Stofa (digital cable) Stofa (analog cable) Stofa (total) You See (digital cable) You See (analog cable) You See (total) TDC (IPTV) Canal Digital (satellite) Viasat (satellite) Boxer (DTT) Others

Subscription & VOD revenues (US$ million) Stofa (digital cable) Stofa (analog cable) Stofa (total) You See (digital cable) You See (analog cable) You See (total) TDC (IPTV) Canal Digital (satellite) Viasat (satellite) Boxer (DTT) Others

Denmark pay TV forecasts

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Share of pay TV revenues by operator (%) Stofa (digital cable) Stofa (analog cable) Stofa (total) You See (digital cable) You See (analog cable) You See (total) TDC (IPTV) Canal Digital (satellite) Viasat (satellite) Boxer (DTT) Others

Average Revenue Per User (ARPU - US$) Stofa (digital cable) Stofa (analog cable) You See (digital cable) You See (analog cable) TDC (IPTV) Canal Digital (satellite) Viasat (satellite) Boxer (DTT) Source: digital TV research

Denmark pay TV subscriber prospects

Homes by platform (000) 3,000

2,500

2,000

1,500

1,000

500

0 2017 2018 2019 2023 A terres 0 0 0 0 Pay DTT 267 258 254 245 Free DTT 182 182 178 194 Free satellite 45 46 46 46 Pay Satellite 138 134 132 126 IPTV 476 496 513 540 A Cable 0 0 0 0 D cable 1,411 1,415 1,418 1,430

Subscribers by operator (000)

246 Others 233 36 Telia 33 245 Boxer 258 61 Viasat 64 66 Canal Digital 70 353 TDC 325 1,001 You See 990 333 Stofa 330

0 200 400 600 800 1,000 1,200 2023 2018

Denmark pay TV revenue prospects

Revenues by platform ($m) 1,200

1,000

800

600

400

200

0 2017 2018 2019 2023 Pay DTT 97 93 90 85 Pay Satellite 91 86 84 79 IPTV 248 252 255 242 A Cable 0 0 0 0 D cable 597 588 576 527

Revenues by operator ($m)

92 Others 102 18 Telia 18 88 Boxer 93 39 Viasat 43 39 Canal Digital 43 167 TDC 173 369 You See 412 121 Stofa 135

0 50 100 150 200 250 300 350 400 450 2023 2018

Digital TV Research publication schedule for 2018 Title Publication Price 1 Sub-Saharan Africa Pay TV Forecasts January £1200/€1440/$1560 2 Middle East & North Africa Pay TV Forecasts February £1200/€1440/$1560 3 Asia Pacific Pay TV Forecasts March £1200/€1440/$1560 4 Latin America Pay TV Forecasts March £1200/€1440/$1560 5 North America Pay TV Forecasts March £500/€600/$650 6 Eastern Europe Pay TV Forecasts March £1200/€1440/$1560 7 Western Europe Pay TV Forecasts March £1200/€1440/$1560 8 Global Pay TV Subscriber Forecasts May £1500/€1800/$1950 9 Global Pay TV Revenue Forecasts June £1500/€1800/$1950 10 Global Pay TV Operator Forecasts June £1500/€1800/$1950 11 Pay TV Operator Prospects June £800/€960/$1040 12 Pay TV Revenue Prospects July £800/€960/$1040 13 Netflix Forecasts July £600/€720/$780 14 Sub-Saharan Africa OTT TV & Video £1000/€1200/$1300 Forecasts August 15 Middle East & North Africa OTT TV & Video August £1000/€1200/$1300 Forecasts 16 Asia Pacific OTT TV & Video Forecasts September £1000/€1200/$1300 17 Latin America OTT TV & Video Forecasts September £1000/€1200/$1300 18 North America OTT TV & Video Forecasts September £500/€600/$650 19 Eastern Europe OTT TV & Video Forecasts October £1000/€1200/$1300 20 Western Europe OTT TV & Video Forecasts October £1000/€1200/$1300 21 Global OTT TV & Video Forecasts October £1800/€2160/$2340 22 Global SVOD Forecasts November £1500/€1800/$1950 23 OTT TV & Video Prospects November £1000/€1200/$1300 24 SVOD Prospects December £900/€1080/$1170

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Digital TV Research publication schedule for 2017 Title Publication Price Asia Pacific Pay TV Forecasts March £1200/€1440/$1560 Global Pay TV Subscriber Forecasts May £1800/€2160/$2340 Global Pay TV Revenue Forecasts May £1800/€2160/$2340 Global Pay TV Operator Forecasts May £1800/€2160/$2340 Netflix Forecasts June £750/€900/$975 Global Pay TV Subscriber Databook June £750/€900/$975 Global Pay TV Revenue Databook June £750/€900/$975 Global Pay TV Operator Databook June £750/€900/$975 Sub-Saharan Africa OTT TV & Video Forecasts July £1000/€1200/$1300 Middle East & North Africa OTT TV & Video £1000/€1200/$1300 Forecasts July Asia Pacific OTT TV & Video Forecasts August £1000/€1200/$1300 Latin America OTT TV & Video Forecasts August £1000/€1200/$1300 North America OTT TV & Video Forecasts September £600/€720/$780 Eastern Europe OTT TV & Video Forecasts September £1000/€1200/$1300 Western Europe OTT TV & Video Forecasts October £1000/€1200/$1300 Global OTT TV & Video Forecasts October £1800/€2160/$2340 Global AVOD Forecasts October £1000/€1200/$1300 Global SVOD Forecasts October £1500/€1800/$1950 Online TV Piracy Forecasts November £1200/€1440/$1560 SVOD Digest November £500/€600/$650 OTT & Pay TV Forecasts December £1500/€1800/$1950

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