In the US IPTV operators between them added 1.16 million new subscribers in 2014 as a whole, according to Strategy Analytics’s report, ‘Digital Television Operator Performance Benchmarking: North America’. Verizon accounted for 387,000 of these new subs while AT&T added 478,000. This was enough to offset continuing losses in the cable and satellite sectors to bring the US pay TV total number of subs up by 101,000, reversing two quarters of decline after a gain in Q1. This left the year as a whole almost flat with a loss of just 4000 subs, negligible against a yearend total of 96.1 million.

Similarly in the Netherlands, growth in IPTV delivered via DSL or fiber pushed total pay TV net additions of 20,000 in Q4 2014, bringing the country’s total pay TV base to 7.76 million. This still leaves cable as the largest sector there just as in the US, with 54% of total pay TV subs, against 28% for IPTV almost entirely accounted for by the dominant Telco KPN.

IPTV is also the engine of global pay TV, including many developing markets, growing its total subs base by 14% in 2014, according to ABI Research. The satellite base grew 7% and cable just 3%, averaging out at 5% for pay TV as a whole, reaching 924 million. Yet with the IPTV total still under 100 million by most counts, there is plenty of scope for further growth, although over time it will increasingly overlap with OTT. A growing number of traditional pay TV operators offer OTT-only offerings to attract new subscribers, either to expand beyond existing physical footprints in the case of cable and IPTV, or generally to attract to pay TV to people who could or would not afford a subscription before. There are few if any forecasts that clearly separate out OTT-only customer numbers, or revenues derived from those who do not have a regular pay TV subscription. But Strategy Analytics recently indicated that subscription VoD revenues grew about 26% in 2014 to reach $5.1 billion and account for 48% of OTT video revenues including advertising. The firm forecast that this OTT revenue total would double between 2013 and 2019 to $18.0 billion. 

Both OTT and IPTV face a new challenge with the arrival of 4K, which will exert renewed pressure on broadband operators to push fiber closer to the home to ensure adequate bandwidth for higher resolution video. This pressure looks like coming first in the US, where almost 50% of US Homes are forecast to own a 4K TV by 2020. According to Strategy Analytics’ Connected Home Devices (CHD) report “Ultra High Definition TV Displays: Global Market Forecast”, demand for UHD TVs is now soaring worldwide as entry level prices drop well below $1000 and the range of models increases. Currently however Asia Pacific is the hotbed of UHD TV, accounting for 75% of the 633% shipments growth to 12.1 million units in 2014, followed by North America at 12% and Western Europe 11%.

With continuing inflation in screen size, a key factor is that one quarter of all 50-inch or larger TVs shipping in 2014 were Ultra HD. Equally though UHD is growing among the sub 50-inch category and will account for the majority of those shipments globally by the end of 2016, according to Strategy Analytics.

“Ultra HD will become the standard resolution for virtually all large screen TVs within 3 to 4 years and we will see it penetrate further into smaller screen sizes as manufacturing efficiencies improve,” said David Watkins, Service Director, Connected Home Devices at Strategy Analytics. “As we saw with the transition from SD to HD, it is the TV manufacturers who are leading the Ultra HD charge although significant steps are being made on the delivery infrastructure and content production parts of the value chain.”

Watkins also indicated that manufacturers would increasingly add wider color gamuts and high dynamic range to differentiate their models and maintain a price premium, which would consume even more network bandwidth if deployed in services.