Cable Bahamas Reports 21% Decline in Pay-TV Penetration as Streaming Surges

Cable Bahamas, a leading communications provider in The Bahamas, has reported a significant 21% decline in pay-TV household penetration over the past seven years. The company attributes this drop to the rising popularity of Netflix-type streaming services in the country.

Why this matters: The shift towards streaming services has significant implications for the telecommunications industry, as traditional pay-TV providers must adapt to changing consumer habits to remain competitive. This trend also raises questions about the future of content distribution and the role of regulatory bodies in ensuring fair competition.

According to Cable Bahamas, household penetration of pay-TV services has plummeted from 65% in 2017 to just 44% in the second quarter of 2023. Meanwhile, a survey found that 77% of respondents now use online streaming services, with Netflix being the most popular choice.

Cable Bahamas argues that the investments made by itself and the Bahamas Telecommunications Company (BTC) in upgrading their networks have ironically facilitated the success of streaming competitors. The faster broadband speeds now offered have allowed over-the-top (OTT) providers like Netflix, Hulu, and Disney to go direct to customers, bypassing traditional pay-TV distribution partners.

"OTT services fulfill the customer's need for access to content in an increasingly effective manner, with access offered via multiple platforms and with content available on demand, offering flexibility to customers on how and when to enjoy the content they value," Cable Bahamas stated in a response to the Utilities Regulation and Competition Authority's (URCA) regulatory review, published on May 10, 2024.

Given the heightened competition in the pay-TV market from these new non-domestic streaming entrants, Cable Bahamas believes that ex-ante regulation by URCA is no longer necessary. The company argues that the entry of additional competitors provides effective market constraints on existing operators.

BTC, another major communications provider in The Bahamas, largely backs Cable Bahamas' assertions regarding the competitive dynamics in the pay-TV and fixed communications services market. BTC disagrees with URCA's view that competition is limited to just legacy cable and direct-to-home satellite services, highlighting the rise of online streaming as the primary driver eroding traditional pay-TV.

The 21 percentage point decline in pay-TV household penetration reported by Cable Bahamas over the past seven years underscores the disruptive impact that Netflix and otherstreaming servicesare having on the telecommunications landscape in The Bahamas. As customers embrace the flexibility and on-demand access offered by OTT providers, the future of traditional pay-TV hangs in the balance.