Pay TV subscriptions drop for the first time since 2009

For the first time since 2009, Malta's pay TV sector reported a drop in the overall number of subscriptions, with more consumers showing a preference for bundled services combining a broadband connection with their television packages.

But this increase in Internet Protocol TV (IPTV) subscriptions was insufficient to compensate for the declines in Digital Terrestrial TV (DTTV) subscriptions and cable-based TV subscriptions.

Pay TV is delivered to households and businesses using cable, aerial broadcast or through Internet broadband.

But the industry also faces tough competition from black-market satellite TV outfits and the proliferation of the Dreambox satellite receiver, which is connected to a dish on the roof and the Internet. The Dreambox receiver uses card-sharing and illegal software patches to transmit satellite TV to a number of users, and is especially sought after by football fans wanting access to the Sky UK or Sky Italia packages.

"Any commercial entity, irrespective of the sector in which it operates, has to contend with competition from illegal practices present in its market," a spokesperson for the MCA told MaltaToday.

"Pay TV is no exception. The market for content provision and distribution is currently going through major structural changes and facing both legal and illegal competition over various channels, primarily today from over-the-top online sources. On a more positive note however, the local pay TV market has, so far, proved to be resilient in the face of such competition."

Pay TV subscriptions totalled 147,896 at the end of 2012, down by 1.2% from the end of 2011. The year-on-year decline happened despite an increase of 2,563 IPTV subscriptions, as other segments of the pay TV market totalled a larger drop in subscriptions.

Analogue cable subscriptions continued on their steep downward trend, falling by 16.2% - from 10,156 at the end of 2011 to 8,516 at the end of 2012.

GO plc's DTTV subscriptions - which are transmitted via aerial - dipped by 3.7% to 62,292, while Melita plc's digital cable subscriptions were down by 0.5% to 73,252.

"The growing consumer preference for bundled services is reflected in the take-up of digital and IP pay TV services as part of a bundle. The number of such subscriptions on a bundle increased from 61,111 at the end of 2011 to 62,678 at the end of last year. This figure represents 45% of total digital and IP pay TV subscriptions recorded at the time," the Malta Communications Authority said in a review of the pay TV market in its annual report.

Both companies still saw their average revenue per subscriber increase from €169.51 in 2011 to  €171.88 in 2012.

The pay TV market is mainly ruled by digital TV: digital cable represents 49.5% of platforms used, while DTTV is used on 42.1%. IPTV so far represents 2.6% of platforms.

Melita holds a 55.3% share of the local subscriber base, down by 0.7% from 2011. The drop in market share was absorbed by GO, which saw its share increase from 44% to 44.7%.

Pay TV packages range from GO's €3.99 Bronze 24-channel package to Melita's €29.99 Extra Large package of over 100 channels on digital and IPTV platforms.