Both Turkcell and Turk Telekom announced 2016 year end results. You can see their TV offers‘ associated slides herebelow. Please click the image to see it in better resolution.
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.
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.
This marks the end of the 3rd year of my dear blog turkishtvmarket.info 🙂 As a kind of tradition, I list down the most popular posts of the year. Herebelow you’ll see the most read top 10 posts of 2016 in order.
- Bein completes takeover of turkish super lig broadcaster Digiturk
- Turkish TV market training course in a nutshell
- Tivibu figures as of end of 2015
- Turkcell TV+ continues its fast growth
- D-smart’s OTT service D-smart-Blu rebranded as BluTV
- A total of 8 euro 2016 games will be broadcasted in 4k Ultra HD resolution on TRT 4K
- Turkcell TV acquired content rights of English premier league for 3 years
- My two cents about Turkish TV market
- Turkcell Superonline celebretes 1 million broadband TV customers
- Netflix Turkey launch aftermath
I’ve been teaching a course in Kadir Has University Istanbul/Turkey at Communications Faculty, New Media department. This semester is the 3rd time I’ve been teaching the course called as „Digital Platforms„. Every semester, there is one midterm and one final exam. If you like you can see the exams of earlier years herebelow.
This week, we had the midterm exam for this semester 2016 Fall. I’ve copied the questions and potential answers as below.
KADIR HAS UNIVERSITY
NM 423: DIGITAL PLATFORMS
FALL 2016 MIDTERM EXAM
- Pay-TV platforms:
a.) List down all the pay-TV platforms available in Turkey together with number of up-to-date subscribers? Also you should mention about the media they are using (satellite, IP etc.) (10 points)
- Digiturk (Satellite) : ~3 million subs
- Teledunya (Cable) : ~1151K subs
- D-Smart (Satellite) : ~925K subs
- Tivibu (IP+Satellite) : 545K subs
- Turkcell TV+ (IP): 303K subs
- Filbox (Satellite) : 35K subs
b) Considering the new Football League Broadcasting rights tender that will take next week which one is more likely to win and why? Please explain with solid arguments. (10 points)
As I’m currently a Turkcell employee, I’d prefer not to comment on this hot topic in order to avoid any misinterpretation 🙂
- OTT-1 : If I were somebody totally unfamiliar with the term OTT (Over-the-top) TV, how would you explain to me what it is and how it has changed the TV industry as a whole? (20 points)
OTT TV could be defined as the delivery of video content over the open internet without the involvement of any telco in the control. OTT TV has changed the TV industry in significant ways.
It allowed content providers/aggregators to deliver their content/services directly to end users. As opposed to the legacy cable or satellite businesses where the Pay-TV operators needs to make a significant amount of investment, OTT TV providers don’t need to have their own infrastructure. They don’t need to worry about scalibility. They are simply benefiting from the existing pipes of legacy telcos which enabled them to achieve very fast Time to Market periods. As a result, end users had a variety of alternatives on top of old DTH services which lead the new concept of ‘cord-cutters’. Incumbent DTH and cable operators first saw OTT TV providers as a threat. They then started increasing to lose customers. On the last few years they started to see them as potential partners to enrich their content offering.
- OTT-2: Globally who is the greatest digital video platform? What makes it the greatest one? What are the competitive advantages compared to the other alternatives? Please explain with solid arguments. (20 points)
Obviously YouTube is the greatest digital video platform in the world. Every minute 60 hours of video is uploaded to YouTube. Even this simple data tells us about the variety and richness of YouTube’s content portfolio. YouTube who is a Google company comes as an native application on Android phones. Hence, it has a dramatic competitive advantage in terms of engagement compared to the other alternatives such as Vimeo, Dailymotion etc. Also YouTube is accessible from a lot of consumer electronic devices which serves as another booster to customer interest. YouTube has lots video channels that users could subscribe to and in return generate revenue for the content owners based on the number of views. This allowed content providers to create their own ecosystem that is constantly growing. YouTube which its ever evolving User interface provides a nice, simple and convenient user experience which is consistent through all different devices. Today YouTube allows content providers to upload 4K, 360 VR and even HDR contents and simply the most advanced digital platform.
- Netflix: There are lots of OTT services available in Turkey i.e. Tivibu, DigiturkPlay, BluTV etc. Among these Netflix has a unique position? What makes Netflix so special? What are the competitive advantages compared to the other alternatives? Please explain with solid arguments. (20 points)
There are a certain number of reason why Netflix is special. First of all, it’s the only global SVOD service . Thanks to having tens of millions of active users Netflix could collect user data from all over the world and benefit those for constantly improving the user experience it’s delivering. It’s far beyond the competition in terms of recommendation engine and personalization. Additionally, it’s hosting Netflix Originals content. In other words, it’s beyond a content aggregator, it’s producing content. (House of Cards, Narcos etc.) Netflix has a superior technology that is allowing to deliver enhanced video quality coupled with its own CDN infrastructure. Netflix is available on a lots of consumer devices which increases the engagement of its subscribers significantly. It’s one of the global lovemarks whose bandwidth usage in USA is more than 37% at peak times. It’s content library in Turkey is hosting more than thousands of TV shows and movies. Having said all those advantages, it’s a known disadvantage. It doesn’t offer neither Live TV nor premium sports content unlike Digiturk etc.
- Smart TV: There are a number of popular Smart TV brands on the market i.e. Samsung, Sony, LG, Arcelik, Vestel etc. Some of the Pay-TV operators (Digiturk , Tivibu etc.) are also offering Smart TV applications as an alternative to STB solution. Nevertheless, what we are witnessing is there is no real success story on the market. What are the main reasons for this? Why Smart TV app of Pay-TV operators did not attract huge interest, why they are still deploying STBs? Please explain with solid arguments. (20 points)
The main reason is the lack of internet connectivity of the Smart TVs. Typical Turkish audiences is seeing TV sets as big monitors rather than expecting the similar level of smartness like mobile phones. If Smart TV is not connected or the internet connection is not reliable it’s not feasible to deliver a service-grade TV service to paying customers. Secondly, there is a huge amount of fragmentation on Smart TV space. There are lots of different TV brands most of them having their own technology stack and dependencies. Also the average life cycle of Smart TVs are around 7 years which makes it quite inefficient to maintain old legacy TV platforms. In general, Pay-TV operators are willing to design and deploy their own unique user experience (with well defined, tested UI and remote control). However, Smart TV apps mostly depend on the performance and limitation of TV sets which is very complex to keep under control. The overall experience is defined mostly by the Smart TV manufacturer. Lastly. if any customer happens to experience a major issue regarding the service quality or for various marketing reasons, operators would like to manage the customer device (ideally remotely). This is relatively easier to handle with STBs instead of TVs designed and produced a 3rd party.
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.
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.
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: 116KCable:
- Turksat Cable: 1,16 mioIPTV:
- TTNet: 350K
- Turkcell TV+: 268KIn 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.
A few weeks ago Turkcell announced the results for the year 2015. You can have a look to the presentation here.
It is possible to get key figures about Turkcell’s popular TV service Turkcell TV at pages 11 and 12 of the presentation.
Briefly, the service has reached to a total of 588K subs within almost 1,5 years.
Out of this 600K base, the number of IPTV homes are 224K. This has been achieved in 1,5 years which indicates around 40K net addition per quarter. If you look to the trend and check how quickly the number of subs is increasing it’s really impressive.
Having a look to the customer gain in TV market in the past year, Digiturk, D-Smart and Teledunya are all steady with not much changing number of customers. On the other hand, installed base of Tivibu and Turkcell TV+ are on the rise.
Actually, the rise on Tivibu side is due to the new satellite platform. IPTV domain of Tivibu is kind of stucked lately.
Turkcell Superonline has 900K fiber internet customers. Currrently, the ratio of households receiving triple-services is around 25 percent. It’s quite obvious that Turkcell’s main focus will be to increase this ratio over the coming years and eventually to provide tripleplays services to the complete base. Apperantly future is bright for Turkcell. Let’s keep monitoring the progress and how sustainable is this ramp-up.