The difficulties for techno people in Turkish TV Subscription Market

Tivibu just announced that number of Tivibu Home subscribers has been arrived to “remarkable 1 million” milestone.






The underlying technology of Tivibu Home is twofold:

  • IPTV : The service has been launched back in 2011. As of Q2 of 2017, there are around 545K  Tivibu IPTV customers.
  • DTH: The satellite service that is marketed as “Tivibu Uydu” has been introduced in Q2 of 2015 following the acquisition of Champions League and UEFA digital rights. The remaing half of the ~1 million subscibers are belonging to this segment.

What I’ve done is I’ve extracted Tivibu’s number of subs and ARPU data along the last 15 quartersfrom this sheet published by TT and put into the following graph.

There are 2 points I’d like to emphasize in regards to the trend of the both metrics:

  • Following the acquisition of Champions League and UEFA rights and commercial launch of Tivibu Uydu service back in Q3 of 2015, there has been a significant ramp-up on the number of subs. Please check the graph above. Also ARPU started to increase around that time as the package fee for the games was higher than the legacy packages.
  • Secondly, following the start of the new campaign that allows TT mobile subs to get the Tivibu Sports package starting from 5 TRY in April 2017, there has a slowdown impact on the ARPU figures. While ARPU was 17.9 before the kick-off of the campaing it reduced to 16.4 on the last quarter. (Please check the second blue arrow on the graph above.)

I regret to admit that in Turkish Pay-TV market, delivering the best user experience while bringing the latest technologies to the market is not as valued as the developed western countries like France or UK or others in the eyes of the majority of the digital TV consumers. As a industry professional I wish this could be the other way around. In essence, what matters in this geography is simply key sports content ( i.e. Turkish Football League, CL League ) at the best price level.

Having said that one needs to also think about the very logical reasons behind this which has a concrete commercial explanation. Let’s check the USD equivalent of Tivibu’s ARPU while keeping in mind that majority of the cost elements are in USD such as STB and content.

  • ARPU as of Q1 2014 : 12.3 TL. At that time the USD/TL exchange rate is 2,13. Hence ARPU/month is 5,77 USD.
  • ARPU as of Q3 2017 : 16.4 TL. At that time the USD/TL exchange rate is 3,8. Hence ARPU/month is 4,31 USD.

This means along the 15 quarters the main revenue generator stream that is simply the monthly fee collected from the subs base is decreased from 5,77 USD to 4,31 USD. In other words, generally speaking the revenues has reduced by 34 %. As a result the top managements are asking to  procurement and relavent teams to purchase less expensive (which means less CPU power, reduced memory and other resources, inexpensive remote controller etc., ) STBs with a reduced set of features, making the best content deals etc. Also I assume complementary techno budgets had been shaved.

As a consequence the market conditions is quite though for Turkish TV Techno market and in a way we all are trying to pull a rabbit out of hat. 

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