video markets across countries. Figure 7.8 reports the share of households that obtain
video service by type of platform: (analog) broadcast, digital broadcast (DTT), cable, sat-
ellite, and telco (IPTV). The relative importance of each of the platforms shows signif-
icant heterogeneity. For example, less than 15% of households are served by cable in the
UK and Brazil (and not at all in Italy), whereas almost 70% are served by cable in the
Netherlands and Canada. In almost all countries, analog broadcast is free and cable,
satellite, and telco provision is paid. DTT is sometimes free and sometimes paid (even
within country);
Figure 7.9 reports for the same countries the share of TV households
served by free versus pay platforms. This varies widely, between 70% and 80% in Spain
and Brazil to less than 15% in the Netherlands, the USA, and India.
7.2.2 Cross-Platf orm Television Statistics
Table 7.4 reports aggregate statistics about the television industry for a selection of
countries in 2011. Reported is information about availability, access, use, and revenue
by funding source. Information about subscribers by platform was already shown in
Figure 7.8. Average individual television viewing varies substantially across the listed
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Broadcast DTT Cable
The Netherlands
Satellite Telco
Figure 7.8 Relative importance of video platform across selected countries (% of TV HH), 2011. Notes:
Depicted is the share of TV households across a range of countries in 2011 that obtain video service by
each of five platforms: (analog) broadcast, digital broadcast (DTT), cable, satellite, and telco (IPTV).
Source:
Ofcom (2012, figure 3.28).
285
The Economics of Television and Online Video Markets
countries, from a low of 2.0 hours for India to a high of 4.9 hours for the US.
27
Aver-
age price data is not readily available, but a close relation, “average revenue per unit,”
measures the average expenditure on pay television by purchasing households.
These were converted to US dollars using 2011 IMF exchange rates (
Ofcom,
2012
). These also vary widely, from a low of $3–4 in India and Russia to a high
of over $83 in the US.
28
The US is also not surprisingly the world’s largest television
market, with annual aggregate revenue of $160.4 billion or $112.73 per household per
month. Of this, almost two-thirds come from subscriptions and one-third from adver-
tising, with a negligible share coming from public funding. The difference in per-
household television industry revenues and the relative importance of alternative
sources of funding also vary widely across countries. The reasons for this variation have
to my knowledge not previously been analyzed in the academic literature.
Figure 7.10 shows total TV revenue across time by groups of countries. The US
accounts for over 40% of the estimated world television revenues of $400.5 billion.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Free TV Pay TV
The Netherlands
Figure 7.9 International comparison of pay TV versus free TV (% of TV HH), 2011. Notes: Depicted is the
share of TV households served by free versus pay platforms across a range of countries in 2011. Source:
Ofcom (2012, figure 3.34).
27
Chapter 5 (figure 5.2, this volume) shows that, in the US, watching TV takes up almost half of the time
people spend using mass media, almost double the next closest medium (listening to AM/FM radio).
28
This likely differs from the $67.64 reported in Figure 7.5 as it includes expenditure on premium networks
and ancillary fees.
286
Handbook of Media Economics
Table 7.4 TV industry statistics across selected countries, 2011
North
America Western Europe Asia
Latin
America
USA UK Germany France Italy Sweden Poland Japan Russia India Brazil
Households (HHs)
Total HHs 118.6 26.4 40.4 27.6 24.4 4.5 14.3 49.3 52.7 229.3 62.5
Television HHs 117.4 25.7 38.3 27.0 24.2 4.4 12.9 49.2 50.4 140.2 61.3
Subscribers
Free-to-air “subs” 18.4 19.8 15.8 15.0 19.1 1.0 1.5 43.5 26.1 12.5 45.3
Pay subs 100.4 14.3 22.6 19.9 5.1 3.4 11.8 14.1 24.3 129.7 16.0
Viewing
Hours per day 4.9 4.0 3.8 3.8 4.2 2.7 4.0 3.7 2.0 2.7
Subscription cost
Monthly ARPU $83.01 $48.39 $20.99 $39.97 $37.96 $27.13 $18.71 $47.59 $3.34 $3.74 $53.60
TV industry revenue
Aggregate TV rev. 160.4 18.1 18.6 16.4 12.5 2.9 3.8 49.9 5.8 8.8 19.9
Subscription 102.2 8.1 6.3 8.1 3.9 1.4 2.5 18.5 1.3 6.1 8.0
Advertising 57.8 5.7 5.7 4.9 6.2 0.9 1.3 22.7 4.5 2.4 11.5
Public funding 0.5 4.3 6.6 3.5 2.3 0.6 0.1 8.7 0.0 0.3 0.4
Monthly per-HH rev. $112.73 $57.31 $38.36 $49.44 $42.75 $53.02 $22.44 $84.35 $9.13 $3.21 $26.51
Subscription $71.80 $25.66 $13.00 $24.33 $13.37 $ 25.62 $14.58 $31.33 $2.13 $2.23 $10.71
Advertising $40.59 $18.00 $11.67 $14.69 $21.26 $16.20 $7.39 $38.41 $7.05 $0.86 $15.28
Public funding $0.34 $13.74 $13.69 $10.47 $8.00 $11.19 $0.37 $14.67 $0.03 $0.12 $0.58
% from each source
Subscription 63.7 44.8 33.9 49.2 31.3 48.3 65.0 37.1 23.3 69.6 40.4
Advertising 36.0 31.4 30.4 29.7 49.7 30.6 32.9 45.5 77.2 26.7 57.7
Public funding 0.3 24.0 35.7 21.2 18.7 21.1 1.7 17.4 0.3 3.8 2.2
Reported are aggregate statistics about the television industry for a selection of countries in 2011. Households and subscribers are measured in millions. Total free-to-air and
pay subscribers can exceed TV households due to multiple subscriptions per household. ARPU“Average Revenue per Unit,” measured in US dollars per subscribing
household per month, is a common industry metric measuring the average household expenditure on pay-television services. Aggregate TV industry revenue is measured in $
billions. Monthly per-household revenue is measured in US dollars per household per month.
Sources:
SNL Kagan (2014a) and Ofcom (2012).
Global television industry revenue has exhibited steady year-on-year increases, with sig-
nificant growth coming from developing countries like the BRICs.
29
Figure 7.11 shows
that in the US, as in many world markets, television advertising has not suffered from the
recent growth in Internet use and advertising. As emphasized in
Chapter 5 of this volume,
whether measured by time spent watching, subscription revenue, or advertising
revenue, “television appears to be the most important mass medium” (Chapter 5, this
volume, p. 209).
Other patterns are evident from a closer look at US data. Figures 7.12 and 7.13 break
out US programming market revenue by program type and revenue source across time.
While broadcast network revenue has remained roughly constant across time, cable,
RSN, and premium network revenue have all grown substantially. Advertising revenue
has been the historical driver of programming market revenue, but was surpassed by affil-
iate fee revenue in 2010.
What is driving this revenue growth and what are the consequences for the distribu-
tion market?
Figure 7.14 shows that patterns of programming expenditure by channels
match that of revenue growth, while
Figure 7.15 shows that this higher expenditure has
253.4
269.5
285.5
306.4
317.6
314.4
346.5
365.7
338.8
370.7
351.1
380.5
400.5
0
50
100
150
200
250
300
350
400
450
2004 2005 2006 2007 2008 2009 2010 2011
USA Europe/Canada
Japan/Australia BRIC
Total selected countries Total world
Figure 7.10 TV industry revenue over time. Notes: Depicted is the estimated TV industry revenue of
different regions of the world, the total of these regions, and the world total between 2014 and 2011.
Sources:
Ofcom (2012, figure 3.15) and PriceWaterhouseCoopers (2012, p. 57).
29
BRIC ¼Brazil, India, and China.
288
Handbook of Media Economics
Newspapers TV and cable Radio Internet
1959 1989 20091979 199919691949
40%
15%
20%
25%
35%
30%
10%
5%
0%
Share of total
Figure 7.11 Media share of US advertising, 1949–2009. Notes: Depicted is the share of US advertising
revenue by media type between 1949 and 2009. Sources:
FCC (2011a). Martin Langeveld at Nieman
Journalism Lab; data from NAA, TVB, IAB, McCannShare.
0
50
100
Revenue (millions)
1989 1995 2001 2007 2013
Year
Total Cable
Broadcast Premium
RSN
Figure 7.12 US programming market revenue by channel type, 1989–2013. Notes: Depicted is the
revenue accruing to four different types of programming networks (channels) in the television
programming market between 1989 and 2013: Broadcast, Cable, Regional Sports Network, and
Premium Networks. See also
Tables 7.1–7.3 for further details about revenue for these networks in
2012. Source:
SNL Kagan (2014a).
289
The Economics of Television and Online Video Markets
..................Content has been hidden....................
You can't read the all page of ebook, please click here login for view all page.