Carriers Have Only Around 100 Million Pay-TV Users, Less Than 60% Via IPTV

Some numbers out today that underscore the challenge telecoms operators have had in attracting customers to their pay-TV platforms, including the newer services like IPTV, against competition from incumbent TV providers and the growing allure of over-the-top services, from Netflix (NSDQ: NFLX) to YouTube.
Researchers at TeleGeography say that by the end of Q3, carriers only had about 94 million subscribers for their pay-TV services, which works out to a 12 percent share of the 783 million consumers who take pay-TV services worldwide.
And while operators like Verizon and IPTV leader France Telecom (NYSE: FTE) have staked a lot of investment on developing IPTV services to grow their TV business, this is not, at the moment, the only game in town.
IPTV accounts for less than 60 percent of telcos’ pay-TV subscriptions — and it isn’t used by the carrier with the most pay-TV subscribers, America Movil. It has 10 million subscribers across Latin America, where it owns a mixture of cable and satellite interests and “hardly any” IPTV, the analysts write. Russian carrier Rostelecom, meanwhile, serves 85 percent of its TV subscribers with cable.
Even operators like Verizon, which has invested millions in its FiOS IPTV network, is embracing some legacy systems, too — namely in its partnership with Comcast, where the two jointly sell Verizon Wireless (NYSE: VZ) with Comcast’s cable-TV services, covering markets where FiOS is not offered.
Still, TeleGeography’s analyst John Dinsdale believes that IPTV’s star could be rising: he projects that by 2016, carriers will control 16 percent of the pay-TV market, with IPTV subscribers doubling in the next four years. But that still only means about 200 million, in an overall market of 1.25 billion.
The numbers also point to some other trends/developments. Among them:
When you have more than one carrier working in pay-TV, there is likely to be more of a scramble to pick up compelling content to be more competitive. Hence, Telefonica (NYSE: TEF), which currently has only about two million pay-TV customers in Latin America, is busily signing content deals to enhance its offerings. The latest of these was last week, when it inked a deal with Sony (NYSE: SNE) to distribute its films and TV content in the region via its TV platform.
It doesn’t get mentioned in the TeleGeography numbers, but one wonders how significant a competitive force over-the-top content will be against both carriers and incumbent pay-TV providers.
Just today, YouTube (NSDQ: GOOG) — which is in the process of launching of 100 “premium” content channels — demonstrated just how much of a video magnet it is: it is now streaming four billion views daily, up 25 percent in the last eight months. Users are also uploading 60 hours of video every minute — there’s some more quirky number crunching around this activity encapsulated in a video graphic.
And on the subject of OTT services and competition in Latin America, that is also a region where Netflix is pushing hard in its international expansion strategy.