Kagan's survey of global pay-TV trends indicates that multichannel penetration of TV households will peak by the end of 2020, reaching 60.7%. Global pay-TV penetration is expected to start declining in 2021, continuing for the foreseeable future, driven by accelerating subscriber declines in North America as well as continuing TV household penetration declines in Western Europe and the Latin America and Caribbean regions.

Despite the expected multichannel penetration decline worldwide, the global number of pay-TV subscribers will continue to grow in the next five to 10 years, with all regions except North America experiencing growth. These statistics highlight the growing trend of cord-never homes that skip pay-TV in favor of over-the-top and virtual multichannel services as well as free-to-air digital terrestrial television primarily in Europe, while cord cutting is speeding up in North America and advanced Asian and Western European markets as well as Brazil.

Our models indicate that the global multichannel subscriber base will likely reach over 1.1 billion by the end of 2020, equating to a 2.1% year-over-year increase compared to 2.0% year-over-year growth in 2019. While stay-at-home orders and increasing service affordability worldwide boosted multichannel service take-up in 2020, the annual subscriber increase is forecast to decline to 1.5% in 2021 as the pandemic wanes.

The global multichannel economy is expected to generate $208.2 billion in video service revenues by the end of 2020, a 4% year-over-year decline, exacerbated by falling multichannel service ARPUs as operators offered incentives including discounts, free premium channels and debt forgiveness to avoid subscriber churn due to pandemic-related income loss and the sudden cancellation of major 2020 sports events, including the postponed Summer Olympic Games. North America, however, has remained the most lucrative multichannel region, accounting for over half of global revenue as of year-end 2019. Global multichannel revenues are forecast to continue declining over the next six years, although year-over-year declines are expected to reduce and be mainly driven by North America.

While cable has remained the dominant multichannel platform globally, cable subs are modeled to continue declining over the next five years at a 0.5% CAGR, largely due to migration to IPTV in Asia-Pacific and Europe.

China, India and the U.S. have remained the largest multichannel markets by far, which should collectively claim 58% of the global subscriber total by the end of 2020. China and India alone claimed half of the global market by the end of 2019.

Global top operators

The 20 largest multichannel operators in the world accounted for 36.9% of the global market at the end of 2019, up from 36.1% at the end of 2018. The five largest operators alone, which include China Telecom (Hong Kong) International Ltd., China Unicom (Hong Kong) Ltd., Tata Sky Limited, Comcast and AT&T Communications LLC, accounted for over 20% of global subs as of year-end 2019.

The global COVID-19 pandemic affected the growth of the top 20 operators in the first half of 2020, with quarterly growth shrinking to 0.6% compared to 1.1% compound quarterly growth rate in 2019. U.S.-based Comcast and AT&T as well as India's Tata Sky experienced the largest declines in their quarterly growth rate in the first half of 2020, compared to 2019.

Global Multichannel is a service of Kagan, a group within S&P Global Market Intelligence's TMT offering. Clients may access the full article by clicking here.