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SVoD providers seen to go more local as most pay-TV operators bank on OTT services to support growth

Strategic Highlights
Published: 2020-07-09


In 1Q20, quarantine measures have also been implemented in the Eastern European region in light of the COVID-19 outbreak although fewer cases have been recorded than its neighbouring regions. We observed that operators responded quite similarly as their Western European counterparts by offering expanded TV contents, free TV channels, and discounted VoD services during the period.

In terms of impact, we did not observe a significant change or uptake in pay-TV subscriptions among the operators we monitored in 1Q20. Rather, we observed a stable rate of growth for most operators, similar to the trend we have seen in the previous quarters - as seen in the chart. As per InfoCom’s Quarterly Television Monitoring service, some operators exhibited sustained growth mainly due to expanded TV contents. The growing popularity of over-the-top (OTT) services (e.g. O2 TV, Orange TV Go, etc.) likewise supported this development, with some operators such as Telefonica O2 in Czech Republic sustaining its double-digit growth of around 30% in pay-TV subscriptions. This is partly due to the increasing take-up of its O2 TV offers which include a monthly prepaid O2 TV Sport Pack, O2 TV HBO, and Sport Pack tariffs.

InfoCom expects continued growth in pay-TV subscriptions in the next periods, especially IPTV, network-owned OTT, and external OTT subscription video-on-demand (SVoD) services. To sustain or maximise revenue potential, operators can consider diversifying further their portfolios through additional SVoD integration (e.g. Netflix, Amazon Prime, HBO Go, and potentially Disney+) wherein users can have more flexibility to choose the OTT service. As we have observed, most pay-TV providers in the region continued to capitalise mainly on their own/dedicated OTT services with mostly localised contents. But with the increasing push from the European Commission (EC) directing SVoD providers such as Netflix, Amazon etc. to increase the share of local contents (i.e. TV shows and films made in Europe) to at least 30% of their overall portfolio, we are expecting some growth potential for these services. We are already seeing increasing OTT integration among operators in Poland, with some providers such as T-Mobile now offering several SVoD options in their portfolio (e.g. Netflix, ipla, Amazon Prime Video, Eleven Sports).

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Published: 2020-07-09

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