Survey: Global Pay TV Penetration Will Begin Declining Next Year, Showing Why Streamers Are Expanding Internationally

Can pay TV stage an end-of-life revival? The new carriage deal between Disney and Spectrum has given cable providers in the United States hope that they can partner with streaming services to help users perceive their product as a better value and keep them subscribed for longer.

• New data from Ampere Analysis shows that global pay TV penetration will begin to fall for the first time in 2024.
• Paramount+ is due to expand into more territories in the coming months, and Hulu could launch worldwide for the first time now that it is set to be 100% owned by Disney.
• Max has licensing deals with plenty of international outlets, demonstrating that streaming platforms are trying to take advantage of the retreat of cable.

Penetration of Pay-TV Set to Peak Globally

New data released by the London-based firm Ampere Analysis has bad news in store for providers who still think pay TV has a long-term future. Ampere predicts that global pay-TV penetration (the number of pay TV subscriptions relative to the total number of available households) is set to peak in the fourth quarter of 2023 at 60.3%. That means that starting in 2024, global pay-TV penetration will begin falling for the first time ever. By 2028, penetration will have declined by nearly four percentage points.

The decline will be driven by North American audiences. Ampere states that pay-TV penetration on this side of the Atlantic has dropped from 84% in 2009 to 45% in 2023. Top pay-TV providers lost 1.8 million customers in the third quarter of 2023 alone, but continuing growth in Europe and Asia will also turn around and fall into decline after 2025 according to Ampere’s forecasts.

“Growth in global pay TV uptake has been driven over the last five years by Asia Pacific and Central & Eastern Europe,” said Rory Gooderick, senior analyst at Ampere. “However, declines coming from the Americas, which are driven by streaming competition and the high price of pay TV in North America, currently sitting at over $90 a month, will contribute to global pay TV penetration declining for the first time in 2024.”

Which Streamers Are Ready to Expand Internationally?

The retreat of pay-TV around the globe leaves streaming services with a great opportunity. Users in international markets might start to see more carriage deals like the Disney-Spectrum agreement referenced above; streaming services may be eager to bundle themselves with international pay-TV providers to increase their circulation and give viewers an alternative while they watch less of their pay-TV service.

Despite the projected decline in the reach of pay TV products, cable, and satellite platforms will remain a powerful force in the TV world, and important distribution partners for streaming products, as evidenced by the recent distribution deal between Disney and Charter in the US, which saw select Disney streaming services bundled into Charter’s TV packages,” Gooderick said. “This package structure, already increasingly common in Europe and parts of Asia, offers a framework for traditional cable TV companies to transition their business into a streaming aggregation play, and stabilise subscriber trajectories.”

Users should look to Paramount+ as an example of a streamer that’s already following these practices. Paramount Global CEO Bob Bakish pointed that fact out in early November, and is now available in more than fifty countries around the globe. The streamer launched in Mexico, Canada, and other countries this month and will be spreading its wings even further next year.

Disney has not announced any expansion plans for Hulu, but it’s a good bet that such plans are in the works. The Mouse House recently agreed to a deal with Comcast to purchase the 33% of Hulu that Comcast owns which smooths the way for an international launch; Disney likely decided not to roll Hulu out to international markets because it wanted to keep the service’s valuation low as it negotiated with Comcast.

Max may take a little longer to reach some international audiences, but its content won’t. The streamer has licensing agreements with other platforms in countries like Australia and Japan that will keep it out of those territories until 2025 or after. The streamer is already available in more than 60 countries, however, and international expansion isn’t off the table for Warner Bros. Discovery.

There are plenty of opportunities for streamers to pick up users internationally, even as Disney mulls selling its Indian operations to have more cash for its domestic streaming concerns. Pay-TV penetration will begin falling globally for the first time next year, and streaming services must be prepared to put their best foot forward in order to build scale with more users.