Pay-TV faces an uphill struggle if it is to remain profitable in the future, according to a new survey by Credit Suisse’s Stefan Anninger. The analyst recently forecast a drop of 200,000 pay-TV subscribers in the US over the coming year due to both economic difficulties and what he cites as a revolt by young people against expensively priced subscription packages. According to Anninger there is a growing number of “cord nevers” (as opposed to “cord cutters”) who have never purchased pay-TV and this will be the biggest problem facing the industry over the next 10 years. Young people who are used to accessing different video experiences for free over the internet may not feel the need to jump on the pay-TV bandwagon when the economy improves, Anninger claims. They are happy to watch programmes on small screens that are not high definition and spend as much of their time using social media or playing video games as they do watching TV.
The forecast comes on the back of a survey by Bain & Company which claims that internet TV homes will be the norm by 2014. The global consulting firm predicts that within the next two years the number of households owning internet-connected TV will reach the 60 percent mark in the USA, UK, France, China and India. All this means that significant changes lay ahead for the media and entertainment industry, as companies battle it out for profits and market share among this new platform. According to Anninger pay-TV can survive these changes, but it will have to offer consumers substantially lower-priced choices if is to do so.
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