A recent change in German law has triggered a significant upheaval in the country's pay TV landscape, affecting over a third of all pay TV households. Traditional cable providers have been hit hard, losing up to 40% of their pay TV customer base as a result, with IPTV operators and subscription OTT services well positioned to gain a short-term benefit from the change.

Since the 1980s, a law in the Telecommunications Act in Germany known as the additional cost privilege or “Nebenskostenprivilag” has allowed landlords and housing associations to bill cable TV fees to tenants as part of their operating costs. After a transition period, the law was officially revoked in Germany on July 1st 2024, leaving millions of tenants with the ability to choose their preferred household TV technology (if any) for first time in decades.

The impact has been swift and substantial, with traditional cable operators Vodafone and Tele Columbus seeing a 30% and 40% year-on-year (YoY) fall respectively in their pay TV customers in Q3 2024. Other operators in Germany however have welcomed the regulatory shift, with IPTV providers Deutsche Telekom and Waipu.tv in particular seeing boosted growth. Waipu.tv, a pure IPTV provider which offers low cost, personalisable TV services, saw +48% YoY growth in Q3 2024.

The rapid growth of Waipu.tv is unsurprising: According to Ampere Media Consumer, the most important factor determining pay TV service choice in Germany is price, with 24% of consumers in Q3 2024 citing this as their top priority. This highlights the importance for cable operators in Germany to focus on pricing to remain competitive after this loss.

However, despite a successful quarter for non-cable providers, the combined growth of these operators only accounted for about one-fifth of the subscribers lost during this period due to the regulatory shift, with the remaining consumers yet to replace their cancelled subscription.

Rather than these consumers cutting the cord in favour of SVoD services, however, Ampere’s Media Consumer survey suggests they are simply choosing not to replace a service they never used to begin with. The Q3 2024 Consumer wave showed the number of consumers in Germany claiming to take a pay TV subscription in Q3 2024 remained stable, suggesting that the majority of lost subscribers were inactive users.