IHS: Pay-TV booms in Middle East

2015 was the year of growth for the pay-TV market in the Middle East and North Africa region, according to a new report from IHS.

The report, entitled Middle East and North Africa Pay TV Market Monitor, says the number of pay-TV households jumped 10 percent in 2015 to 4.95 million. In the 13 countries covered by the annual report, revenues from pay-TV passed the billion-euro mark for the first time.

Revenues from primary households’ subscriptions grew 37%, from €852 million in 2014 to €1.17 billion in 2015, the report noted. “Pay-TV in the Middle East and North Africa region is growing rapidly and faster than any other region we analyse,” said Constantinos Papavassilopoulos, senior analyst, IHS Technology.

IHS forecasts that pay-TV subscribers will increase to 6.54 million by the end of 2020, up 32 percent on the end of 2015 and representing a CAGR of 6% over the five-year period.

IHS expects that the positive drive of the pay-TV market will continue persistently for the next five years, with revenues almost doubling to just over €2 billion in that time frame. The growth will be due to the enhanced level of competition between the major operators, the introduction of TV Audience Ratings Systems in the Gulf States, the expansion of fibre networks, which facilitate the offering of premium pay-TV services and the growth of the SVoD OTT services.

The opening of the Iranian TV market, a largely untapped market for pay-TV business, is providing a wealth of opportunities for the regional operators. According to local data sources, 71% of TV household in Tehran are equipped with a satellite dish. But there are still barriers to be surpassed.

“The online-video market is very nascent,” Papavassilopoulos said. “IHS put broadband penetration at 56% of households at the end 2015. However, due to the Iranian government policy of regulating access to the internet for its citizens, broadband speeds are lower than in neighboring Arab states. Content will also have to be carefully chosen to appeal to the Iranian audience. Simply repurposing content that was made for wider Arabic audiences will not work for Iran.”

There is optimism both inside Iran and internationally that the lifting of sanctions will put added pressure on the government to relieve some of these restrictions, according to the IHS report. IHS forecasts that TV advertising revenues can grow from $275 million in 2015 to $627 million in 2020 if the normalisation of trade between Iran and the rest of the world continues. “The TV market would benefit hugely,” Papavassilopoulos said. “Our forecast figures would represent a healthy CAGR of 18%.”

Pay-TV growth at two-year high

Pay-TV operators are enjoying the highest rise in subscriptions for two years.

The latest quarterly Multiscreen Index report from informitv shows most operators are currently gaining subscribers. The 100 pay-television services in the informitv Multiscreen Index gained a total of 8.16 million subscribers in the last quarter of 2015, an increase of just over 2%.

“Despite some losses, our index of leading operators worldwide shows an overall subscriber increase at the close of 2015,” said Dr William Cooper, the editor of the informitv Multiscreen Index. “A quarterly rise of 2% shows there is still growth in pay-television, particularly in emerging markets.”

There were 2.07 million more subscribers in Europe, the Middle East and Africa. Sky added 337,000 subscribers in Europe, while Tricolor in Russia gained 200,000. However, the greatest gains were in the Asia Pacific region, which added 4.99 million subscribers. Five operators in India accounted for just over 4 million of them.

In North, Central and South America the number of subscribers rose by 1.09 million. Sky Mexico gained 230,000, while DIRECTV added 214,000 in the United States.

The 10 services with the greatest gains added a total of 5.11 million television subscribers in the last quarter and 11.05 million over the course of 2015.

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Russian pay-TV revenues fall

Increased competition from the internet and free public digital TV services contributed to a fall in Russian pay-TV revenues in the first quarter.

Quoting data provided by TMT Consulting, Vedomosti reports that they amounted to R17.5 billion (€235.6 million ), down 1.9% on the previous quarter. However, the general trend remains upwards, with the figure representing an annual growth of 12%.

Much of the reduction in Q1 could be attributed to Tricolor TV, the country’s leading pay-TV platform, which saw its revenues fall by 20% q-o-q. This was put down to seasonal factors, and Tricolor TV also pointed out that its revenues in Q1 this year were 32% higher than in the corresponding period in 2015.

The attraction of the internet in Russia is underlined by the growing number of users. This amounted to a monthly figure 80.5 million in 2015, or 9.2% more than a year earlier. It is also seen by the popularity of IPTV services, and in particular the success of those operated by Rostelecom.

US pay-TV continues to lose subscribers

The thirteen largest pay-TV providers in the US, representing about 95% of the market, lost about 385,000 net video subscribers in 2015.

According to the Leichtman Research Group this compares to a loss of about 150,000 subscribers in 2014, and a loss of about 100,000 subscribers in 2013.

The top pay-TV providers account for 94.2 million subscribers — with the top nine cable companies having over 49.0 million video subscribers, satellite TV companies about 33.7 million subscribers, and the top telephone companies nearly 11.5 million subscribers.

“2015 marked the third consecutive year for pay-TV industry net losses, yet the total number of subscribers for major pay-TV providers (including DISH’s Sling TV) has declined by less than one million since the industry peaked in 1Q 2012,” said Bruce Leichtman, president and principal analyst for Leichtman Research Group, Inc.

“2015 also saw significant shifts for cable and Telco providers. The top cable providers cumulatively had their best year since 2006, and had about 870,000 fewer losses than in 2014. Telcos had about 1,170,000 fewer net additions than in 2014, and had their worst year since they began providing video services in 2006.”

Other key findings include: The top nine cable companies lost about 345,000 video subscribers in 2015 – compared to a loss of about 1,215,000 subscribers in 2014; Top cable MSO losses were the fewest in any year since 2006.

Satellite TV providers added 86,000 subscribers in 2015 (including gains from DISH’s Internet-delivered Sling TV) — compared to a gain of 20,000 in 2014; Not including gains from Sling TV, DBS providers lost about 450,000 subscribers in 2015.

The top telephone providers lost 125,000 video subscribers in 2015 – compared to a gain of about 1,050,000 net additions in 2014; Telco net adds in 2015 were the fewest in any year since the services started in 2006.

In 4Q 2015, the top pay-TV providers added about 110,000 subscribers – compared to about 90,000 in 4Q 2014.

Top cable MSOs added about 125,000 subscribers in 4Q 2015 – their first quarter for net video additions since 1Q 2008.

DirecTV net adds of 214,000 subscribers in 4Q 2015 were higher than in any quarter since 4Q 2010
AT&T U-verse lost 240,000 subscribers in 4Q 2015 – compared to a gain of 73,000 subscribers in 4Q 2014.

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Vodafone eyes Spanish TV expansion

Vodafone is preparing to launch a new TV service in Spain.

Neeo reports that it will make its debut on March 7 and be delivered via ADSL, xDSL and VDSL.

Although it is as yet unknown if the number of channels the service will offer will be the same as Vodafone TV Fibra, its cost is expected to be similar.

Furthermore, reception will be through a new device with very similar functionality to TiVo but with a completely different interface.

Neeo adds that Vodafone has been working on the new system for months and completely changed what was Ono TV Online to launch Vodafone TV Online. The latter is an app that gives access to over 43 live channels on smartphones, tablets and iPads.

Spain’s Vodafone TV ended 2015 with over one million subscribers, adding 100,000 in the last quarter. In its results, published earlier this month, the company noted that take-up had been helped by the addition of Netflix last October.

Spain's Pay TV subscribers down 44,000 in 2Q 2015

Spain’s Markets and Competition Commission (Comisión Nacional de los Mercados y la Competencia – CNMC) has published telecommunications and audiovisual statistics for the country for the second quarter of 2015.

In the quarter, total pay TV subscribers fell by 44,000 to 5.35 million, driven by a 150,000 reduction in satellite TV subscribers. Year-on-year, the market grew by over 1 million subscribers, almost entirely on account of growth in Telefónica’s Movistar IPTV service. Telefónica completed its acquisition of Prisa’s 56% stake in Canal+ España during the period, giving it a dominant market share in Spain with over 70% of pay TV subscribers.

Pay TV subscribers by technology

                 I/2014    II/2014   III/2014    IV/2014     I/2015    II/2015    Δ Q-o-Q    Δ Y-o-Y  Δ Y-o-Y
              ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------  -------
IPTV            947,748  1,296,592  1,665,765  1,990,972  2,268,318  2,366,186     97,868  1,069,594    82.5%
Satellite     1,631,607  1,597,311  1,580,313  1,553,010  1,549,511  1,399,532   -149,979   -197,779   -12.4%
Cable         1,128,605  1,141,636  1,131,062  1,141,008  1,161,639  1,197,118     35,479     55,482     4.9%
DTT             232,084    247,153    237,900    231,406    225,177    198,411    -26,766    -48,742   -19.7%
Others           29,779     26,664     94,532    143,575    192,809    191,744     -1,065    165,080   619.1%
              ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------  -------
TOTAL         3,969,823  4,309,356  4,709,572  5,059,971  5,397,454  5,352,991    -44,463  1,043,635    24.2%

Pay TV subscribers by provider

                           II/2014   III/2014    IV/2014     I/2015    II/2015  Δ Q-o-Q    Δ Y-o-Y  Δ Y-o-Y
                         ---------  ---------  ---------  ---------  ---------  -------  ---------  -------
Telefónica (Movistar+)           -          -          -          -  3,817,243  -61,363    987,471    34.9%
 Telefónica (Movistar)   1,205,797  1,576,779  1,881,457  2,136,286          -        -          -        -
 DTS (Canal+)            1,623,975  1,674,845  1,696,585  1,742,320          -        -          -        -
Ono -> Vodafone            777,667    775,144    783,887    791,460    815,784   24,324     38,117     4.9%
GolTV                      247,153    237,900    231,406    225,177    198,411  -26,766    -48,742   -19.7%
Orange                      90,795     88,986    109,515    132,032    140,079    8,047     49,284    54.3%
TeleCable                  128,109    128,910    129,891    129,951    129,951        0      1,842     1.4%
Euskaltel                  120,970    113,222    110,399    112,651    114,977    2,326     -5,993    -5.0%
R                           93,086     91,944     94,608    105,023    113,884    8,861     20,798    22.3%
Others                      21,804     21,842     22,223     22,554     22,662      108        858     3.9%
                         ---------  ---------  ---------  ---------  ---------  -------  ---------  -------
Total                    4,309,356  4,709,572  5,059,971  5,397,454  5,352,991  -44,463  1,043,635    24.2%

Russian pay-TV: a confusing picture

There seems to be little agreement as to the performance of Russia’s pay-TV market, with leading authorities claiming it either grew or contracted in 2015.

According to ComNews, iKS Consulting claims that it increased in value terms by 11.7%, while TMT Consulting gives an even higher figure of 21.3%. J’son & Partners Consulting, on the other hand, argues, that it decreased by 3%.

Looking at specific figures, iKS Consulting state that Russia’s pay-TV market was worth R68.4 billion (€814.5 million) in 2015, while the subscriber base, at 39.2 million, was 5.4% higher than a year earlier.

Tricolor TV was the leading provider in terms of market share (30%), followed by Rostelecom (215), MTS and Orion Express (7.1% each) and ER Telecom (7%).

On the other hand, TMT Consulting gives a figure of R70 billion for the value of Russia’s pay-TV market in 2015. It also says that ARPU grew by 14% during the year, from R134 to R151, and predicts the market will grow to over R73 billion this year.

TMT Consulting in addition says that Rostelecom (27%) was the leading player, followed by Tricolor TV (21%), ER Telecom (10%), MTS 99%) and Akado (5%).

Meanwhile, J’son & Partners Consulting, who has not completed their final analysis on 2105, says that the pay-TV market in Russia was worth R64.7 billion. However, it also believes it will bounce back to its 2014 level this year, with package offers and hybrid TV services driving growth.

Content exclusivity key to MENA pay-TV growth

Legitimate pay-TV operators in the Middle East and North Africa are increasingly relying on exclusive content rights to gain subscribers, according to a new report from Digital TV Research.

This is especially true for satellite TV platforms such as beIN and OSN. Dipping into the deep pockets of its owners, beIN in particular has been successful in building its subscriber base in a short period of time.

Simon Murray, author of the fifth edition of the Digital TV Middle East & North Africa Forecasts report, said: “Gaining subscribers in the MENA is no mean feat as piracy remains rampant in most countries. More than half of the region’s homes receive free-to-air satellite TV signals. Furthermore, established pay TV operators now have to compete against new platforms as several IPTV operators put greater emphasis on SVOD than on traditional linear channel packages.”

Despite these hurdles, the number of pay TV homes across the 20 countries covered in the report will double between 2010 and 2021 to 20.9 million, with Turkey accounting for 37% of the 2021 total. From the 5.40 million pay TV homes to be added between 2015 and 2021, 1.98 million will come from Turkey, 0.63 million from Uzbekistan and 0.59 million from Egypt.

About a fifth TV households legitimately paid for TV signals by end-2015. This proportion will climb to 24.2% by 2021. Qatar will record 80% pay-TV penetration by 2021, with Georgia (69%), Israel (68%) and the UAE (62%) also high. However, pay-TV penetration will be below 10% of TV households in Algeria, Egypt, Jordan, Morocco, Syria and Tunisia.

Legitimate pay-TV revenues will climb by 82% between 2010 and 2021 to $5.02 billion. However, growth will only be 25% between 2015 and 2021. Turkey and Israel are expected to contribute 45% of the region’s pay-TV revenues in 2021; down from 52% in 2015 and 63% in 2010.

From the $1,028 million pay-TV revenues to be added between 2015 and 2021, Turkey will supply $206 million, the UAE $141 million and Saudi Arabia $194 million. Revenues in Israel will fall sightly over this period due to greater competition and as subscribers switch to bundles (which means lower TV revenues per subscriber).

Satellite TV will continue to dominate pay-TV revenues, taking nearly two-thirds of the 2021 total (similar to the 2015 proportion). Satellite TV revenues will be $3.21 billion in 2021, up by $0.62 billion on 2015 and up by $1.54 billion on the 2010 total. Greater competition is forcing down satellite TV ARPUs.

The number of homes paying for IPTV will overtake cable subscriptions (analogue and digital) in 2021. There will be 5.36 million IPTV subs in the region by 2021; more than double the 2015 total. IPTV revenues will grow from $140 million in 2010 to $1,022 million in 2021.

For more information on the fifth edition of the Digital TV Middle East & North Africa Forecasts report, please see the Broadband TV News webshop.

DTH drives Russian pay-TV market

The DTH platform Orion Express was the fastest growing pay-TV service in Russia in the first nine months of this year.

Research published by Telecom Daily show that it ended the third quarter with 2,748,000 subscribers, or 6.5% more than at the end of 2014.

It was closely followed by the market leader Tricolor TV, its 11,600,000 subscribers total being 6.4% higher than at the end of 2014.

Rostelecom grew its subscriber base by 3.6% to 8,270,000, ER Telecom by 2.7% to 2,690,000 and MTS by 2.4% to 2,825,000 over the same period.

The research notes that DTH still remains the most popular method of receiving pay-TV services in Russia.

The total number of pay-TV subscribers in the country stood at 39.1 million as of the end of Q3, up from 36.9 million in the corresponding period in 2014.

Tricolor drives Russian pay-TV growth

The number of pay-TV subscribers grew by 520,000, or nearly 2%, in the first half of this year.

According to data produced by ComNews Research and published by ComNews, it stood at 38.32 million as of the end of June, with the five leading operators – Tricolor TV, Rostelecom, Orion Express, MTS and ER-Telecom – accounting for 82% of the total.

Growth was influenced by such factors as growing interest in HD; the reduction of the analogue subscriber base; and strong interest in special offers for digital TV services.

The ‘star performers’ in terms of subscriber growth in H1 were Tricolor TV and Orion Express, both of which posted figures of over 4.5%. This allowed Tricolor TV to further strengthen its position as the market leader and Orion Express to move up from fifth to third place.

As of the end of June, Tricolor TV had 11.42 million subscribers, Rostelecom 8.2 million, Orion Express 2.7 million, MTS 2.68 million and ER Telecom 2.62 million.

ComNews Research notes that while subscriber growth in H1 this year and the corresponding period in 2014 was almost identical, 80% of the growth this year was accountable to Tricolor TV.

African operators lead regional pay-TV surge

Pan-African pay-TV platforms are set to boom, according to a new report from Digital TV Research.

According to the Eastern Europe Middle East & Africa Pay TV Operator Forecasts report, pay DTT platform GOtv will gain 5.84 million subs between 2014 and 2020 to reach 7.50 million – more than quadruple its 2014 total.

Rival StarTimes will experience similar growth to climb by 4.39 million. GOtv’s sister operator and satellite TV platform DStv will gain 4.32 million subs and satellite TV platform Canal Plus 1.34 million.

The Pan-Arab satellite TV services will also add subs, with beIN Sports up by 768,000 and OSN by 630,000. Other big strides will take place in Russia, with Tricolor up by 2,473,000, Orion by 910,000 and Rostelcom by 873,000. Liberty Global will add 869,000 subs in Central and Eastern Europe.

Tricolor, Russia’s low-cost satellite TV platform, will remain the largest pay-TV operator by subscribers. Pan-African DStv will climb to second place; rocketing by 56% to 12.06 million subs. Sister company GOtv will occupy fourth place by 2020. Rival StarTimes will also show strong growth.

Pay-TV subscriptions for the 112 operators across 33 territories covered in the report will nearly double from a collective 56.5 million in 2010 to 102.1 million by 2020. Covering 182 platforms, these operators represent more than 90% of the region’s pay-TV subscribers.

However, not all of the operators will add subscribers, with 14 expected to decrease between 2014 and 2020. Romania’s RCS-RDS will lose 477,000 TV subs between 2014 and 2020, followed by pan-Arab ART (down 293,000) and Hungary’s Digi TV (down by 88,000 subs).

Total subscription and VOD revenues for the 112 operators will nearly double between 2010 and 2020 to almost $15 billion. DStv will remain the wealthiest operator over the forecast period, followed by Liberty Global. However, Russia’s Tricolor, the largest pay-TV operator by subscribers, does not even make it into the top 10 operators by revenues.

DStv will also be the biggest winner; increasing revenues by $1,246 million between 2014 and 2020. Sister company GOtv will follow by adding $545 million. More African growth will come from Canal Plus (up $484 million). Pan-Arab beIN will climb by $443 million.

These revenues are for subscriptions and VOD only, and therefore do not include other revenues such as broadband, telephony, advertising, equipment sales and rental, etc.

For more information on the Eastern Europe Middle East & Africa Pay TV Operator Forecasts report, please see the Broadband TV News shop.

Pay-TV growth continues in Hungary

Close to 3.5 million homes in Hungary now receive a pay-TV service of some description.

Data published by the regulator NMHH show that as of the end of July there was an estimated 3,441,000 such homes, covering the entire market.

Between them, the 10 major market players had 3,164,560 subscriptions.

The eight largest players in the cable/IPTV sector had a combined total of 2,149,799 subscriptions, of which 57% (1,221,771) were digital.

Meanwhile, the three major players in the DTH sector between them had 902,906 subscriptions and the pay-DTT service MinDig TV Extra 111,855.

Regardless of technology, the three leading providers were UPC, Telekom and Digi, with market shares of 26.8%, 25.1% and 24.3% respectively.

Growth still found in pay-TV

The worldwide television subscriber base increased by close to four million in the second quarter of 2015.

According to the informitv Multiscreen Index of the 100 leading pay-television services the total number of subscribers rose by 3.94 million or just over 1% over the quarter. 54 of the 100 services in the index reported net subscriber gains, although many of these were marginal.

Operators in Europe, the Middle East and Africa reported the greatest number of gains, accounting for 2.35 million digital television subscribers between them.

The majority of operators in the United States lost subscribers, however there was still an overall increase across North, Central and South America of 0.23 million. Cable companies gained the most subscribers, adding 1.82 million worldwide, with satellite and telcos each adding just over a million.

The Multiscreen Tracker of ten leading multiscreen services gained 0.48 million customers over the quarter and 2.65 million over a year.

“While many services in the United States lost television customers, the worldwide trend shown by our regular report is of organic subscriber growth of around 1% a quarter,” said Dr William Cooper, the editor of the informitv Multiscreen Index.

“We also expect consolidation to continue as service providers achieve growth through economies of scale.”

The Multiscreen Index now represents over 380 million digital television subscribers, compared to around 340 million for the previous year. The increase is a result of both organic growth and corporate consolidation drawing more subscribers into the index of 100 services.

83% of U.S. households subscribe to a pay TV service

Decline in Penetration Over Time not Solely Caused by Those Leaving the Category

DURHAM, NH — New consumer research from Leichtman Research Group, Inc. (LRG) finds that about 83% of all households nationwide subscribe to some form of pay-TV service. The percentage of households that subscribe to a pay-TV service is down from 87% in 2010, but up from 81% in 2005.

While the total number of subscribers for the top pay-TV providers at the end of 2Q 2015 is similar to the total at the end of 2Q 2010, over the past five years, the US Census Bureau reports that occupied housing in the US increased by more than 4.5 million units (with all the growth coming in renter-occupied housing). As a result, penetration of pay-TV in residential households has decreased from five years ago.

Among TV households that do not currently subscribe to a pay-TV service, 17% paid for a service in the past year, while 70% of non-subscribers last subscribed over three years ago, or never subscribed to a pay-TV service. Overall, about 2.5% of TV households paid to subscribe to a service in the past year, but currently do not — compared to 1.5% in 2010, and 2.3% in 2005.

These findings are based on a telephone survey of 1,222 households nationwide and are part of an LRG study, Cable, DBS & Telcos: Competing for Customers 2015. This is LRG’s thirteenth annual study on this topic.

Other related findings include:

• In households using a TV, 12% of home owners do not subscribe to a pay-TV service — compared to 23% of renters (renters are more likely to be non-subscribers than in any year since 2006)
• 21% of those who moved in the past year do not currently subscribe to a pay-TV service — compared to 12% in 2010
• 35% using one TV set at home are non-subscribers — compared 10% using two or more TVs
• Mean reported monthly spending on pay-TV service is $99.10 — an increase of 39% since 2010
• 63% of non-subscribers get a subscription video on-Demand (SVOD) service, and 62% have an over-the-air (OTA) TV antenna
• In total, 5% of all households are pay-TV non-subscribers with both an SVOD service and an OTA antenna — while 4% of all households are pay-TV non-subscribers with SVOD but no OTA antenna.

“Changes in the dynamics of the pay-TV industry are not driven just by those exiting the category, but also those coming into the category,” said Bruce Leichtman, president and principal analyst for Leichtman Research Group, Inc. “Historically, consumers have gone in and out of the pay-TV category, primarily for economic reasons. While the rate of those leaving is actually similar to a decade ago, those who are entering or reentering the market has decreased over time, and the industry is not keeping pace with rental housing growth.”

Record pay-TV subscriber losses in US

SNL Kagan estimates the US cable, DTH and IPTV platforms collectively shed more than 600,000 video subscribers in the three months ended June 30, falling to 100.4 million combined residential and commercial subs at mid-year.

The slide, which follows an uncharacteristically weak first quarter, points toward the likelihood of a much larger decline for full-year 2015 than the industry produced between 2010 and 2014, during what could essentially be seen as a period of general malaise.

The second-quarter crater was the product of a dramatic softening in the IPTV video sector, combined with an accelerated drop in DTH subscribers along with cable’s persistent decline. While cable sub losses slowed, they remain by far the greatest source of downward pressure on multichannel subscriptions. Speculation swirls around the decline in DISH Network subscribers coinciding with the promotion of the provider’s alternative Sling TV OTT offering, but the estimated loss from DISH was compounded by a decline at DIRECTV to drive the satellite total lower.

Cable’s basic-subscriber losses, at 350,000, came in at their lowest level since 2008, when the segment shed 211,000 basic video customers in the seasonally weak period. For perspective, from 2009 through 2014, second-quarter net losses averaged 609,000.

The telcos increasingly appear to be trading subscriber gains for improved financials. AT&T’s U-verse has aligned its strategy with DIRECTV’s focus on profitability. As a result of the belt tightening, the combined multichannel video subscribers served by FiOS and U-verse were flat at 11.7 million at the end of the second quarter, behind net adds of just 4,000.

The DBS segment lost an estimated 304,000 subscribers, as DIRECTV and DISH Network both reported record declines. The DBS segment retreated to just under 34 million subs. (The DBS figure has moved from a reported total to an SNL Kagan estimate as DISH changed its financial reporting.)

Pay-TV growth helps Rostelecom

Russia’s Rostelecom ended the first quarter with 8.1 million pay-TV subscribers, or 7% more than a year earlier.

Of these, 2.9 million opted for IPTV services, up 24% on the same period in 2014.

Rostelecom’s revenues in Q1 amounted to R71,710 million (€1,293 million), down 11% (consolidated) on the same period last year. OIBDA was R24,525 million (-7%) and net income R2,143 million (-69%).

Commenting on the results, Sergey Kalugin, president of Rostelecom, said: “Our first quarter results clearly demonstrate that we are delivering on our strategic objectives. Our broadband and pay-TV subscriber bases continue to expand, ARPU is growing and we remain committed to developing innovative services. As a result, these rapidly growing market segments are gradually increasing their overall contribution to Rostelecom’s revenue, which already accounts for 37%.

“Despite the promising growth of the digital segments, the high comparison base caused by one-off income gained during the Sochi Winter Olympics in the first quarter of 2014 meant that we were unable to increase revenues in nominal terms this quarter. We are pleased to have achieved a solid OIBDA margin and that our efforts to curb the rise in financial expenses have paid off, despite the significant increase in the market cost of borrowing and volatility in the capital markets.

“As reflected by our first quarter results, we are consistently achieving the goals set out in our five-year strategic plan. We remain on track to fulfilling our strategic objectives and we look forward to seeing the Company’s continued growth.”

West European pay-TV set to grow

Cord cutting is not expected to make much of an impact in Western Europe despite signs of market maturity, with pay-TV penetration forecast to increase from 56.7% at end-2014 to 60.4% in 2020.

In fact, according to The Digital TV Western Europe Forecasts report, which covers 18 countries, the number of pay-TV subscribers will climb by 2.57 million in 2015 to 99.00 million, up from 92.86 million in 2010, as Western Europe begins to shrug off the recession.

Pay-TV subscriptions will only increase by 8.38 million (up by 8.7%) between 2014 and 2020 to 104.81 million. However, the number of digital pay-TV subscribers will climb by 23.1% (nearly 20 million), with analogue cable subs falling from 11.31 million in 2014 to zero by 2019.

Paying IPTV subscriber numbers will overtake pay satellite TV ones in 2015. IPTV subscriptions will climb by 8.6 million (up by 37%) between 2014 and 2020 compared with 1.2 million additions for pay satellite TV (up by 5%) and 0.3 million for pay DTT (up by 6%). Digital cable subs will increase by nearly 10 million (up by 30%) over the same period.

Simon Murray, principal Analyst at Digital TV Research, said: “Despite the number of pay-TV homes increasing, pay-TV revenues will remain flat at around $32 billion. ARPU is falling in most countries and on most platforms. The pay-TV arena is becoming more competitive as newer platforms (especially IPTV ones – but also including OTT/SVOD) launch. Greater competition means cheaper channel packages. Bundling increases overall ARPU for operators, but leads to lower TV ARPU.”

Satellite TV will remain the most lucrative pay-TV platform, but its revenues will fall every year from 2011 – despite subs numbers rising.

Cable TV revenues peaked in 2012. Cable will lose $1 billion (down by 8.6%) between 2013 and 2020 – although subscriber numbers will also fall (by 6.1%). However, IPTV revenues will climb by 26.7% between 2014 and 2020 to $5.51 billion (with subscriber numbers up by 37.1%).

The UK ($7,574 million) will still be the most lucrative pay-TV market by 2020. Despite having the most pay-TV subs by some distance, Germany’s pay-TV revenues will be a lot lower than the UK – at $4,460 million. In fact, France and Italy will not be too far behind Germany despite having fewer pay-TV subs.

Further details about the report can be found by clicking on this link.

Spanish pay-TV market takes off

Spain ended 2014 with 5,059,971 pay-TV subscribers, or 76% more than the 3,845,378 posted a year earlier, according to data produced by the regulator CNMC.

Telefónica was the market leader with 1,881,457 (741,126) a showed the sharpest growth, followed by DTS (1,696,585 v 1,649,031) and Ono (783,887 v 789,895).

Meanwhile, pay-TV revenues in Q4 2014 amounted to €485.01 million, up from €422.31 million in the same period in 2013.

DTS accounted for the lion’s share (€306.79 million v €293.07 million), followed by Telefónica (€108.60 million v €53.04 million), Ono (€36.07 million v €35.95 million) and others (€33.56 million v €40.25 million).

Pay-TV subscriber base reaches 6.90mn in Karnataka as of June 2014

Pay television market in Karnataka has an overall subscriber base of 6.90 million at the end of June 2014, as per an estimated report by Dataxis. There has been a meagre growth rate of 0.90% quarter-on-quarter. The research firm has reported that Karnataka has over 2.5 million digital cable pay television subscribers and 4.46 million analogue cable television subscribers at the end of June 2014.

Den Networks Karnataka, IMCL Karnataka, Hathway Karnataka and ACT Karnataka are the leading players in terms of pay-TV subscribers in the state. Den, IMCL, Hathway and ACT’s total subscribers in the pay-TV market stood at 2.5 million, 1.36 million, 900,000 and 452,000 subscribers at the end of June 2014.

Den Networks Karnataka has added over 50,000 subscribers in the second quarter 2014 to its overall pay-TV market. Its digital cable pay-TV and analogue cable TV subscribers stood at 2.5 million and 450,000 respectively at the end of June 2014. IMCL Karnataka, Hathway Karnataka and ACT Karnataka have added over 30,000, 40,000 and 30,000 pay-TV subscribers respectively to its overall pay-TV market in the Q2 2014.

Subscriber numbers to fall for 40 of Europe's Pay TV operators

Pay TV revenues to fall for half of Europe’s top operators

BSkyB’s proposed acquisition of 21st Century Fox’s stakes in Sky Deutschland and Sky Italia will create a pay TV operation that will rival Liberty Global in subscriber terms. However, with limited pay TV subscriber expansion possible for their existing assets, both companies will not want to stop there.

BSkyB has many plans encourage German and Italian subscribers to take up value-added services. Liberty Global is doing the same – including the conversion of its analog cable subscribers.

Beyond this, the number of takeover targets is diminishing due to several recent high profile acquisitions– including approval for Liberty Global to buy Ziggo. Vodafone has upped its activity in the fixed environment, such as the purchases of Kabel Deutschland and Spain’s Ono.

Covering 103 operators in 26 countries that represent 84% of subscribers, the European Pay TV Operator Forecasts report reveals how well the major players will perform – and shows which operators are the most attractive acquisition targets.

The report from Digital TV Research forecasts that subscriber numbers will fall for 40 of these operators between 2013 and 2020, due to greater competition (including online TV & video) and analog cable subscribers defecting to (often cheaper) digital platforms.

On the other hand, Russian satellite TV platform Tricolor will gain 3.8 million subscribers between 2013 and 2020. Subscriptions will more than double for six operators (Telecom Italia, Spain’s Telefonica, Bulgaria’s Vivacom, the UK’s TalkTalk, Greece’s OTE and Russia’s Vimpelcom) between 2013 and 2020.

Total subscription and VOD revenues for the 103 operators increased from $33.7 billion in 2010 to $35.8 billion in 2013. However, the total will only grow to $36.2 billion by 2020. These operators accounted for 91% of European pay TV revenues in 2013.

Subscription and VOD revenues will fall for 50 of the 103 operators (49%) between 2013 and 2020, including six of the top 10 operators. These revenues are for subscriptions and VOD only, and therefore do not include other revenues such as broadband, telephony, advertising, equipment sales and rental, etc.

BSkyB will remain at the top of the league, recording $6.44 billion subscription and VOD revenues by 2020. Liberty Global closed the gap on BSkyB considerably with the acquisition of Virgin Media.

However, these two companies will be among the highest revenue losers, although France’s CanalSat will lose the most ($355 million) between 2013 and 2020. The largest gainers will be Sky Deutschland, Kabel Deutschland and Sky Italia. Revenues will more than double for Telecom Italia, Bulgaria’s Vivacom, Greece’s OTE and Hungary’s MinDig.