SOURCE: NSR

NSR

September 28, 2010 07:00 ET

Direct-to-Home Satellite Markets Expand in Last 12 Months, but Future Remains Mixed

Subscribers Expected to Cross 217 Million by 2019 Despite Increasing Pressure on Margins

CAMBRIDGE, MA--(Marketwire - September 28, 2010) -  According to NSR's new report, Global Direct-to-Home (DTH) Markets, 3rd Edition, the DTH market is showing signs of maturity as developed economies reach saturation after analog switchovers, even as developing economies continue to increase subscriber numbers. At the end of 2009, a total of 113 DTH operators carried television services to over 130 million subscribers, up 14% from last year. The industry generated a staggering $70 billion in subscription revenue at a blended ARPU of $45. For satellite operators, the demand for over 850 transponders maintains DTH applications as the single largest satellite bandwidth consumer. Although the last twelve months was a strong growth period for all regions, NSR expects subscriber growth in the next year to move further away from developed economies towards South Asia and Eastern Europe.

NSR's country-by-country approach allows it to quantify the impact of the economic changes on each region's individual performance. Primary research, in the form of extensive interviews, confirmed that there is no universal truth that governs all platforms. Leading the way, North America is beginning to show signs of slowing down when it comes to DTH subscriber additions. As the United Kingdom's leading operator nears the 10 million mark, Scandinavian providers are losing subscribers to competitive platforms. While operators in the Middle East emerge from a major consolidation, those in Central and Eastern Europe head towards a similar end in a struggle for profitability. Lastly, Sub-Saharan Africa is starting to mimic South America as smaller low-cost platforms emerge in populous countries to challenge the incumbent.

In some parts of the world, governments have played a supporting role by enforcing the migration to digital television, while in others like Southeast Asia, they have blocked entry of DTH operators in an attempt to shield national providers. Even a seemingly simple assumption that growing subscribers adds to profitability is negated by India where platforms are losing money for every new subscriber because of subsidies.

The response to premium services such as High Definition and Digital Video Recorders is polarized even further with the United States and United Kingdom accounting for nearly 80% of premium subscribers.

Highlighting the key findings of the report, Senior Analyst, Prashant Butani comments, "The Pay TV industry as a whole is becoming extremely competitive, be it over-the-top television in North America, digital terrestrial television in Europe or low cost DTH platforms in Africa and India. As far as subscriber growth is concerned, the balance of power has shifted further East with countries like Poland, Russia and India at the forefront. Financially, operators are being forced to rely on advertising and value added services, which will result in considerable pressure on margins."

About the Report
The Global Direct-to-Home (DTH) Markets, 3rd Edition report is a multi-client report now available from NSR. Extending the reach of the 2nd Edition from Market and Industry to Financial coverage, NSR provides a data-intensive look at the DTH industry. In order to capture all facets of this multi-dimensional industry, NSR built extensive databases of Channels, Subscribers and Revenues for over 113 DTH operators around the globe. In addition, each of the industry's parameters has been segmented into four distinct market segments namely, Standard Definition, High Definition, Digital Video Recorder and High Definition Digital Video Recorder. NSR has gone a step further with the 3rd Edition to include a complete financial analysis of each region focusing on Operating Expenses, Earnings and Margins. Over 20,000 data points spanning 10 distinct regions have been formulated to give readers what they value most -- the bottom line. For additional information on this report, including a full table of contents, list of exhibits and executive summary, please visit www.nsr.com or call NSR at 617-576-5771.

About NSR
NSR is an international market research and consulting firm specializing in satellite and wireless technology and applications. NSR's primary areas of expertise include emerging technology, IP applications, and broadcast services. With extensive expertise in all regions and a number of broadband sectors, NSR is a leading provider of in-depth market insight and analyses.