Despite inroads OTT has made in many regions, linear TV via satellite will remain a global growth market with over 12,200 new channels over the next
10 years, reaching over 53,600 by 2026. However, the heady days of exponential direct-to-home (DTH) and video distribution growth appear to be coming to an end as markets saturate and competition increases.
DTH growth will be driven by SD channels, with over two-thirds of the channels carried in 2026 to be in SD format according to the NSR's Linear TV via Satellite, 9th edition. Satellite operators will also benefit from channel growth occurring on the higher bandwidth HD format, indicating that DTH, cable, and IPTV markets are finally reaching an inflection point in terms of their product offerings, partially due to platforms' focus on becoming more premium in nature to compete against OTT platforms, along with a hesitation for platforms to drop channel offerings in significant numbers, due to fear of triggering a cord-cutting subscriber revenue loss.
Increasing levels of compression – and especially HEVC implantation on video distribution to cable and IPTV headends – will have a much greater negative impact on satellite capacity demand growth longer term than any increases to number of channels carried over satellite. Pay-TV platforms are looking to decrease costs so that subscribers will not feel impacted. Reducing capacity costs through compression is one of the core ways that this can be achieved. Consequently, video leasing revenues in some regions will peak in the medium term, as compression and modest pricing declines begin to take effect.
Higher levels of revenue and satellite capacity demand growth traditionally seen in the video market in the past decades are nearly over, with growth becoming
less dynamic than in the past. Nonetheless, certainly the sky is not falling, as DTH and video distribution are expected to remain the bread and butter for many FSS operators globally in the long term, contributing well over USD 6 billion in annual revenues over the next decade.