CEE 2011 > The region and its growth prospects
Digital TV Europe June 2011
ern Europe came through the global econom- ic crisis relatively unscathed. New services have continued to launch, and consolidation is yet to materialise in most markets. This means competition remains rife. Russia and Poland continue to dominate the region’s pay TV market, between them accounting for almost half of revenues. Satellite services have performed particularly well and are expected to overtake cable as the leading platform in 2012.
The pay TV sector in cen-
Digital TV was slow to take off and in many markets that still rings true. But others are starting to see real progress – notably Russia, Hungary, the Czech Republic and Poland – and, according to Informa Telecoms and Media, digital TV is forecast to grow fairly rap- idly in the region. Having ended 2009 with 44 million digital TV homes, the region is expected to close 2015 with 125 million digital households – a near three-fold increase.
Czech Republic
The Czech Republic remains one of eastern Europe’s most dynamic TV markets. The recession had a major impact on the country, with GDP contracting 4.1% in 2009. More than a third of the country’s 4.4 million TV households take DTT services, another third take DTH services (although only 15% are pay- ing customers), a quarter take cable, leaving 5% of TV households with IPTV services. According to the Czech Association of Electronic Communications, cable subscrip- tions reached 1.05 million by end-2009, up 80,000 year-on-year, and 90% of households had access to digital cable services. However, cable is losing market share.
UPC accounts for more than half of Czech cable subscribers. Its operations are located in over 90 cities and towns and the operator ended 2010 with 524,300 cable subs, down from 532,000 a year earlier. However, digital penetration increased to 78.6% by end-2010, with 411,800 subscribers.
UPC also operates its DTH platform UPC Direct in Czech Republic, but the service has lost subscribers recently. It ended March with a total of 81,000 satellite customers after los- ing 4,500 during the first quarter of 2011, put- ting it in fourth place in terms of DTH sub- scriber numbers.
tral and east-
Telefonica O2, which also operates an IPTV service, estimated nearly 1.5 million DTH homes by end-2009, although the telco does- n’t break down its TV subscriber numbers. However, nearly a million of these homes received free DTH services. In September 2006, Romania-based Digi TV won a DTH licence from the Czech Radio and TV Council and a third licence went to CS Link in late 2006. SkyLink became the market’s fourth DTH provider when operator Towercom teamed with card vendor TradeTec to expand the previously Slovak-only service into the Czech Republic in October 2008. SkyLink’s pre-paid DTH service had around 800,000 active smartcards by end- 2010, up 29% from 2009. However, not all are classed as pay TV subscribers. CS Link, backed by SPD Corporation (which holds the Czech Digital Group DTT multiplex licence) and GES Media Asset (which controls half of broadcaster Prima), ended 2010 with 539,000 active prepaid customers in the Czech Republic, up 29% on the previous year. In terms of IPTV, incumbent Telefonica’s service launched in 2006 and ended 2010 with 129,000 subs, losing 9,000 subs over the previous 12 months. Slow subscriber growth has been attributed to greater compe- tition from DTT, which O2 believes presents a significant enough improvement on analogue terrestrial TV to deter Czechs from paying for extra channels. Total DTT penetration was 41.1% at mid-2010. About 1.6 million homes – over a third of TV households – were pri- mary DTT homes in 2010.
Hungary
Hungary has one of the most competitive TV markets in eastern Europe. Over half of its 4.2 million TV households subscribe to cable, though these numbers are falling as homes are attracted either to low-cost DTH or triple- play bundles from IPTV operators. Hungary had 1.48 million digital TV homes at the end of March, according to the latest fig- ures released by the country’s media regulator, the NMHH, up from 1.2 million a year earlier. According to the regulator, based on the coverage of the 12 largest TV distribution net- works, about 3.8 million homes in the country take some form of subscription TV service, with the remaining 800,000 homes taking either analogue free-to-air or digital-terrestrial
TV. Cable and IPTV combined has a market share of 21.8%. DTH accounts for a 33%. Taking all services into account, UPC is the leading platform with a 28.9% share, followed by Romanian company RCS & RDS’s Digi platform with 26.6% and telco Magyar Telekom with 24.8%.
In terms of cable, there are more than two million subscribers split between 400 opera- tors. UPC is the market leader, with 896,00 subscribers, of which 265,000 take digital services. The second largest operator is Magyar Telekom but it is facing falling sub- scriber numbers. It ended March with 402,911 cable TV customers, almost 60,000 fewer than a year earlier. Both UPC and Magyar Telekom also offer DTH platforms. The former ended March with 198,000 after adding 8,400 in the previous three months, while Magyar Telekom has also grown its DTH base to 261,000, up from 196,000 a year earlier. RCS & RDS’s DigiTV DTH plat- form has the most subscribers but it is losing them. It ended 2010 with 357,600, down 13.4% at the end of 2009. Magyar Telekom also offers an IPTV serv-
ice, Hungary’s largest, with 146,135 sub- scribers. It almost doubled its customer base in the 12 months to the end of March.
Poland
The Polish pay TV market is dominated by DTH operators, which between them have attracted eight million subscribers, compared with 4.7 million cable households. By the end of 2010, there were over six mil- lion paying DTH subscribers taking services from one of the four main operators – Cyfrowy Polsat, Cyfra Plus, ‘n’ and TP/Orange. Of those, Cyfrowy Polsat is the country’s largest operator, with 3.43 million subs at the end of 2010. Cyfra Plus, part of the Canal Plus Group, is
Poland’s second-largest DTH operator, with 1.55 million subs at the end of 2010. It offers over 70 Polish channels as well as the Cyfra Plus premium service. It has benefited from holding the rights to Polish soccer matches since the 2006/7 season, but the renewal of the rights has been problematic, with rival bids coming from broadcaster TVN. In 2010, sister company Canal Plus secured the English Premier League rights for three sea- sons.
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