Fi, PuhuTV, BluTV and Originals content

One of the most popular local TV series of this season on Turkish TV industry was ‘Fi‘. It was simply a drama but also unique due to a number of reasons. First of all, it was a series available ONLY online as a OTT content but not broadcasted in the classical sense.  Even though this is quite common in US like examples of many Netflix Originals, it’s quite rare that a TV series with a remarkable budget level like ‘Fi’ is not broadcasted all over Turkey but only available through a OTT service.

At this point, I’d better give a quick background information about the service that owns ‘Fi’. The OTT service is called PuhuTV. It’s backed by a major broadcaster group in Turkey, Dogus Media. PuhuTV has been launched commercially early this year as a free-of-charge, ad-based catchup TV service hosting major TV series from a variety of channels. In order to create an awareness in the market and make some noise, they’ve made a sensational launch for their first and for the time being only ‘Originals‘ content Fi. As there is no Live TV channel offering on PuhuTV, the commercial launch event has been publicly available on YouTube TV. At launch night, the first 3 episodes of Fi has been released. As a matter of fact, producing original content like Netflix or Amazon Prime Video is doing in US is already done before by BluTV which is another OTT service. BluTV is owned by one of theTurkey’s major TV broadcaster Dogan Holding. As of today, there are 3 original, exclusive content on BluTV. On top of these, Netflix Turkey is also working on a brand-new local Originals nowadays specific for Turkish market.

Coming back to the popular TV series Fi, it was not made available all at once, but along a series of weeks unlike the Netflix /Amazon Originals. Typically all the episodes of a OTT type of TV series’ new season are made online on the commercial date which is announced earlier. Then, audiences are looking forward the launch date and watching many episodes in a row once they are available. (i.e. Game of Thrones of HBO, House of Cards of Netflix) Unlike the typical scenario, even though the first 3 episodes of Fi have been made available online in April at the launch event, Fi fans had to wait another few weeks in order to watch the remaining episodes. PuhuTV had relased remaining episodes one by one every week. Eventually, the last episode was online on 16th of June as the season final. I’ve thought about the reason whyPuhuTV management decided to release the episodes over the course of 2-3 months instead of making the complete set of episodes of Fi made online at once,

Even though BluTV and PuhuTV are similar OTT services there is a significant difference between them. While BluTV is a subscription based service, PuhuTV is a free-of-charge, ad-based service. That’s why PuhuTV had to wait the rating results of the first 3 episodes. The result was really impressive. According to the results that has been shared, the first 3 episodes have been watched a total of 3,5 million views within the first 50 hours. For the advertisement agencies, this is the most critical KPI that they care. That’s why PuhuTV management should have first waited to get these results in order to convince the advertisers more easily.  Following the fascinating results of the first 3 episodes which were basically missing ads, we’ve seen many ads as in the form of product placement (embedded into to the content in a relatively natural way). Actually, for a service that is free-of-charge the audiences are more tolerant to ads.

It remains to be seen if this ad-based model will be sustainable in Turkish market. By nature, Turkish TV sector is quite competetive and dominated by more than 500 FTA channels broadcasting  via satellite with a country-wide penetration of more than 70 percent.

 

In Turkey the average fixed broadband speed is 7,2 Mpbs

Based on the latest Akamai’s State of the internet  report ( go to the link for the report) covering Q1 of 2016, in Turkey, the average fixed (mobile is not included) connection speed is 7,2 Mbps.

This implies to a 15% year-on-year increase and 12% of QoQ change with a global rank of 64.

Personally, I am not fortunate enough to have a connection speed of above average. Typically I’m getting 5-6 Mpbs of broadband connectivity. I have a legacy DSL connection subscribed to up to 8 Mpbs broadband speed whereas my lucky friends living in a district with a fiber broadband infrastructure are benefitting 25+ Mbps interbet speed.

The average connection speed is a quite critical figure in terms of QoE of OTT TV service offerings in Turkey. As the video consumption through internet is constantly rising, the increase on the broadband speed is extremely crucial. The potential video quality that could be delivered via 7 Mbps bandwidth is quite satisfactory including 1080p Full HD. (Youtube’s live encoder speeds)

This is really a positive element for the growth story of OTT TV in Turkey coupled with the upcoming regulation to improve the fair usage policy.(AKK)

Tivibu continues its growth trend.

Turk Telekom Group announced 2016 year end financial results. You can see them at this link. Regarding the interest of this blog, let’s have a look to the Tivibu figures.

According to the regulatory body’s official figures, as of Q3 of 2016, Tivibu has a total of 589K subscribers. (428K IPTV customers and 161K DTH customers. )

TT announced a total of 677 subscribers at the end of Q4 2016. We don’t have yet the split of this number but most probably the majority of the net additions comes from satellite domain.

Tivibu customer base was kind of stucked before the launch of satelllite service at the Q3 of 2015. Since then Tivibu gained a momentum and has reached more than 2 million subs including the OTT customers. DTH service allowed TT to provide the DTH service to any household with a satellite dish. Satellite is the most common delivery method of Digital TV services in Turkey.

Fair Usage Policy will be discontinued starting 1th of May

In Turkey, the broadband fair usage policy was one of the most critical barriers that was kind of slowing down the penetration of OTT services.

If one’s broadband consumption per month is above a certain limit (typically 50 GBytes) then the fair usage policy is becoming active and the bandwidth is limited by 3 Mbps no matter to what broadband package you are subscribed to. (Please see below picture) The notification of TT seen below could be translated as: “As you exceeded the monthly fair usage threshold your broadband speed is updated as 3 Mbps on the remaining days of the month. Starting from the beginning of next month your broadband speed will be set based on your subscription package.”

Due to this limitation, it was quite challenging to secure the QoE on OTT service. Also, reaching to the fair usage threshold is just a matter of days if you watch Live TV channels through internet. This has discouraged service provider in Turkey to offer OTT box type of solutions like Now TV in UK.

Fortunately, the fair usage policy is changing this year. According to the BTK’s new regulation starting from 1st of May 2017, the broadband speed after fair usage quota will be adjusted based on one’s original speed. Also, consumption from 2 AM to 8 AM will be out of scope for fair usage quota limitation. Regarding the table below, if one’s broadband bandwidth subscription is from 16 Mbps to 24 Mbps the speed will be set to 8 Mbps instead of 3 Mbps after the fair usage threshold.

I think this is really a key step forward for OTT services. The consumers of OTT services shouldn’t be worrying if they are off-limits as the limited speed is quite still sufficient for typical use cases.

Turkcell Superonline celebretes 1 million Broadband & TV+ customers

Turkcell Superonline fiber internet service and Turkcell TV+ service have both surpassed 1 million subscriber threshold. The homepass for fiber broadband service is 2,6 million households now in 15 cities out of 81 cities in Turkey.

In order to celebrate this milestone, during December 2016 Turkcell will be upgrading the broadband speed of all the customers to 100 Mbps bandwidth. Similarly, Turkcell TV+ users will be authorized to watch all the channels independently form their content package within December. You can watch the press release video here. (in Turkish)

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Turkcell’s multiscreen TV platformu  Turkcell TV+ has reached 1 million customers as the end of October. Thanks to the 4.5 technology the average watching time on mobile clients has reached to 28 minutes per day.  The total download of the mobile Android and iOS clients already reached to 2.5 million. Premier League and NBA official broadcaster Turkcell TV+ is also delivering 2 4K Ultra HD Live TV channes together with the brand new 4K STBs.

100 thousand customers with a single invoice

Turkcell is offering a special bundle package that includes a complete set of solutions. It has 50 Mbps limitless internet (with a 125 GB fair usage quota) 4 GB mobile broadband, 500 minutes voice, 1000 SMS, and Turkcell TV+ offer, This complete package only costs 99 TRY. This package already had 100K subscribers in quite short time.

BREAKING: New tender for Turkish Football rights is on 25th of November

Link in Turkish

Yesterday, the president of Turkish Football Federation(TFF) announced that the new tender for the content rights of Turkish Football League will be issued on 25 November 2016.  

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The RFQ specifications will be announced around the end of this month. As of today, 5 local and 1 European company has completed their application to participate to the tender. The local ones are probablyTurkcell, Digiturk, D-Smart, Turk Telekom and Vodafone. The validity for the new tender will be probably 4+1 years starting from 2017-2018 football season.

The federation is expecting the tender to be finalized around 600 million USD per year. The legacy content owner Digiturk has acquired the rights at the expense of 321 million USD per year (424 million USD including taxes, federation fee and organization fee) in 2010. Demiroren stated that they decided to decrease TFF’s fee from 12 percent to 4 percent. It’s unclear that the declared expected quotation of 600 million USD is including all the costs.

It’s been emphasized that TFF is cooperating with consultants who actively worked on Premier Leauge’s tender. Obviously, TFF will target to maximize the revenue. Hence, it will be no surprise if they design the tender similiar to Premier League case.

Turkcell TV+ acquired content rights of English Premier League for 3 years

At the beginning of September when the Premier League starts Turkish audiences had an puzzling situation since it was not clear enough which Pay-TV operator had the content rights. Digiturk which was the legacy owner of the rights did not have it for this season at that time. It was a local company called Saran Media who had the rights for Turkey region. At first, Digiturk and Saran Media could not come to an agreement. Later on D-Smart announced that they had the rights of EPL. Shortly after both Turkcell TV+ and Digiturk acquired the media rights for 3 years.

Herebelow I’d like to share the insightful analysis of my friend Constantinos from IHS Markit.

Turkcell moves further into pay TV with Premier League rights deal

September 09, 2016  |

Constantinos PapavassilopoulosConstantinos PapavassilopoulosSenior Analyst, Televison Media

Turkcell, the Turkish mobile telecoms operator, has acquired the exclusive media rights for the English Premier League in Turkey for the period 2016 to 2019. Turkcell – the largest mobile operator in Turkey – became the sole broadcaster for the rights following a sublicensing agreement with Saran Media Agency which acquired the rights in January.

Turkcell and Saran Media Agency did not release financial information on the agreement. Turkcell will offer matches via its Turkcell TV Plus IPTV and OTT (fixed and mobile) platforms. Having seen strong growth in its TV services, Turkcell is now expected to bid for the rights to the Süper Lig, Turkey’s domestic football league.

Our analysis

The acquisition of the Premier League rights steps up Turkcell’s involvement in the TV business in Turkey. It marks the first time that the Turkish telco has entered the sports rights market, let alone the premium sports rights market. Up to now, Turkcell TV Plus offered no premium entertainment or sports content. Turkcell TV Plus offers a total of six packages, including a Cinema TV pack and MUBI Film pack), but the telco does not control any first window rights for movies or foreign TV series.

According to IHS Markit Technology data, Turkcell had 34 million mobile customers at the end of 2015, representing a market share of 46.47%. In October 2014 it launched its TV offer, branded as Turkcell TV Plus. This move has paid off as it has managed to almost quadruple subscriber numbers from 60,000 in 2014 to 224,000 in 2015. At the end of 2015, around 150,000 of these were primary IPTV subscribers while another 74,000 IPTV customers also subscribe to another pay TV operator (mainly Digitürk). Its OTT service, called also Turkcell TV Plus, has been even more successful so far, having managed to attract 411,000 subscribers by Q1 2016. A precondition for access to the OTT service is to be a Turkcell Superonline subscriber (either ADSL or Fiber) or a Turkcell 4G subscriber. The OTT service is accessible in Turkey via Apple & Android smart-phones & tablets, PCs, Laptops and a range of connected TVs (Samsung, Grundig, LG, Beko, Vestel).

Turkcell’s strategy is to enrich its TV proposition further, and IHS Markit expects the telco to bid aggressively in the forthcoming tender for the media rights of the Süper Lig (Turkey’s football league). The current rights holder is Digitürk but its contract period expires at the end of the 2016-17 football season and a new tender is expected to be launched in the coming months. For Turkcell, football would be an ideal way of leveraging its €1.62 billion investment in acquiring 172 MHz of spectrum. Turkcell has already started rolling out a 4.5G LTE network across Turkey, providing mobile broadband with speeds of up to 375 Mbit/s, and has experimented with broadcasting sports content via its mobile network, delivering HD video streams of a basketball match over its LTE network in May this year.

Turkcell is following the steps of the other big telco in the country, Turk Telekom, which has exploited sports content as a strategic asset in order to boost its bundled service. Turk Telekom has managed to reverse a downward trend in its IPTV subscribers’ figures, from 308,000 in Q1 2014 to 282,000 in Q1 2015, by acquiring the rights for the UEFA Champions League and Europa League for the period 2015 to 2018. Turk Telekom’s IPTV subscribers at Q1 2016 stood at 351,000, a 25% rise year-on-year.

Reports in the Turkish media indicate that Turk Telekom is also expected to bid for acquiring the rights for Turkish football. However, both telcos will face tough competition from Digitürk, which has been acquired by the Qatari-based BeIn Media Group. The current value of the Süper Lig rights stands at €406 million per year.

My two cents about Turkish TV Market

You may already know my dear friend Özgur Coşar. He is the owner of the website http://tvtechtr.blogspot.com.tr where he writes on a variety of topics on Turkish TV&Radio market. I strongly recommend you to have an eye on his website. Past week he’d asked me to make an e-interview and came up with a number of questions. Following that I wrote down my personal view in return and Ozgur then published it in his blog.  Herebelow you can find the copy of the interview:

It is my pleasure to introduce you Mr. Uygar BOYNUDELİK. He is a friend of mine who is working in the media business in Turkey.
 

1. Dear Mr. Boynudelik, let me start with a classical question. Can you please introduce yourself for my readers. 

Dear Özgür, let me first start by thanking you for regularly writing blog posts and being so sincere and transparent and open-hearted as opposed to the general positioning in the industry. Frankly, I’m a fan of yours, truly 🙂 Anyway, I can simply call myself an engineer who is quite interested in TV technologies. I’m really enjoying reading, writing, researching about it. This is what I do for a living (I’m in charge of STB product management in Turkcell) and also my beloved hobby. I keep writing on www.uygarboynudelik.com in Turkish and on www.turkishtvmarket.info in English since many years. I encourage your readers to have a look my web sites, at the end we’re living in a small industry 🙂

2. When we look at the pay TV business in Europe we see that majority of the population is subscribed to one of the offers. However, in Turkey, payTV has just 35 % market share. According to you what is the main difference between the markets?


Let’s me first start with a quick summary of the Pay-TV market in Turkey. Based on the latest report by BTK (regulatory body in Turkey) the Pay-TV subscribers are categorized as follows:
DTH:
  • Digiturk: 2,79 mio
  • D-Smart:  931K
  • Filbox: 29K
  • Tivibu uydu: 116K
Cable:
  • Turksat Cable: 1,16 mio
IPTV:
  • TTNet: 350K
  • Turkcell TV+: 268K
In total, the number of Pay-TV subs are 5,6 million. Actually there are households with more than 1 subscription. Anyway for the sake of simplicity let’s consider there are around 20 million households, then market penetration is calculated as 28 percent. This is simply the ratio of households with Pay-TV subscription. There are certainly homes with OTT services only such as Netflix, Apple TV etc. Nevertheless, from my perspective the Pay-TV rollout should be calculated with this methodology. After this relatively long introduction, coming back to your question my short answer will be the main difference about the market maturity is simply the average income level of the population. If you compare income per capita in Western Europe to Turkey you’ll notice that income per capita is roughly four times bigger in Europe. I see the gap between average income level as the main reason. Secondly, the high level of piracy is another reason, it’s quite difficult to sell content in Turkey while there are tons of free-of-charge, good quality content on the internet. Thirdly, the negative experience people had with various operators are another barrier for the Pay-TV market to grow. People had suffered a lot due to long-lasting and tiring cancellation processes, miscalculated or miscommunicated surprising bills, not best-in-class customer care cycles etc. All these stuff somehow caused people to try to stay away from 24-hours commitment type of Pay-TV offers.

3. Cable, satellite & terrestrial are used nearly 30 % each for TV reception in Europe. As you well know, in Turkey, TV reception is mainly depended on satellite. What are the results of this situation?

That is a very good point Özgur. I think Turkey is kind of unique with this split. If you don’t mind I’d like to share first my two cents about the root-cause of this uniqueness, later on I’ll come back to the consequences. Historically terrestrial broadcasting has been a real mass in Turkey. The government failed to regulate the licenses and broadcasters with the political power or financial strength managed to build their own towers and broadcast their live TV channels. Considering cable space, this medium has been and still is under control of Turksat -a state-owned company- for many years and they’ve lacked to make the right level of investment to expand their footprint. Even today, cable service is only available on limited areas. On the other hand, satellite installation has been increasing constant since 15-20 years in Turkey. As the satellite dish installation coupled with ‘in China made’ cheap satellite receivers become more and more widely penetrated broadcasters started to invest to have free-to-air channels on Turksat satellite even with poor video quality. The main business model for the broadcasters was to have a free-to-air channel on air, to have the possibility to reach millions of people and try to get any possible level of rating and get the interest from advertisers. Alternatively there are a variety of tele-sales channels that are selling remarkably interesting stuff (things to increase sexual power, things supposedly heal your diseases etc.) and dating platforms. Also from time to time, we hear about lawsuits of the people who one way or another fooled by some of these channels. Today, there are almost 500 FTA channels in Turksat. I think this is not typical. Some of these channels are local, some of them are poor video quality. Coming back to the consequences, this disproportionate balance between the alternative mediums (terrestrial, satellite, cable, IP) resulted in almost to chance for Digital Terrestrial adaptation in the market which is already too much delayed. The content quality of the Live TV channels is significantly biased towards rating. The producers are focused on not producing content with high quality but content that could be appealing for the majority of the people thus bringing better ad revenue. The majority of the programs during daytime is either about matching man and woman willing to marry or Big brother type of programs with a lot of aggression. I think digital terrestrial television is dead at birth.

Many thanks for your answers & time.