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.
In Turkey, there are a number of OTT services. Most of them are owned by Pay-TV operator while there are also a few independent OTT services. To name a few:
- Digiturk Play: Digiturk’s OTT service ( 60+ Live TV channels & hundreds of VOD titles ) Obviously Football League content is the main driver.
- Tivibu Go: Turk Telekom’s OTT service( 100+ Live TV channels & hundreds of VOD titles ) TT group’s main focus is growing the customer base through fixed broadband.
- Turkcell TV+: Turkcell’s OTT service ( 100+ Live TV channels & hundreds of VOD titles ) Turkcell group’s main focus is growing the customer base through mobile broadband thanks to the advanced LTE infrastucture.
- BluTV: D-Smart’s OTT service ( 27 Live TV channels & hundreds of VOD titles ) Dogan Group that owns the D-Smart also owns Kanal D FTA Channel. BluTV is trying to differentiate by the catchup TV content of Kanal D groupwithout ads (the content is in fact available on Kanal D website www,kanald.com.tr with ads) as they own the rights exclusively.
- KabloWebTV: KabloTV’s (formerly Teledunya) OTT service. While all the mentioned services are available to anybody ( i.e. all access) without an existing subscription to the associated service provider, KabloWebTV is only available to Kablo TV customers.
In addition to these operator backed up OTT services, there are also a number of independent OTT services. The most well-known of these is apparently Netflix. Other major OTT services are Filmbox Live (http://www.filmboxlive.com/tr), and Mubi (https://mubi.com)
There is a common point on all of these services. Their business model is based on subscription. They don’t show any ads.
In addition to these services, there was one free service called tvyo (http://www.tvyo.com/) based on ad-revenue. Dogus Media who owns a number of popular FTA Channels such as Star TV, NTV, NTV Spor and Kral TV was behind the service. Lately, Dogus Group has launch a new version of tvyo called as puhutv.(https://puhutv.com/) It’s currenly in beta stage. It’s basically a free of charge service hosting catch-up TV versions of popular TV series of Dogus Group Channels both new ones and old ones as well as old Turkish movies.
Overall puhutv is a new generation version of tvyo that is trying to leverage on Live TV content and generate a significant amount of traffic due to popular series it owns. Once the traffic arrives to a certain level then Dogus Group will generate revenue through ads. Considering the characteristics of Turkish TV audience (fan of 2 hours long TV series, a very high percantage of piracy, low income level etc. ) this ad-based business model seems to have to most possible chance to monetize in OTT domain. Apart from the OTT services of Pay-TV operators , there is no independent OTT provider including Netflix that has been very successfull in Turkish TV Market. We’ll see if the model of puhutv will work.
Turkish Regulatory Body in Telecommunications Industry (BTK) has just announced the market figures for Q4 of 2014. You can download the complete report here. Let me make a quick summary of the figures of TV space.
- Number of TTNet IPTV (Tivibu) service has become 289.496 as of Q4 2014. The same number was 286K one year ago as of Q4 2013. There is clearly a slow down there. The increase in number of subs has stopped during past year. Perhaps it’s because of the high churn rate.
- The number of customers in Turkcell Superonline IPTV (Turkcell TV+) service was 15.270 in Q3 2014. As of Q4 2014, it has reached 60.000. There is big growth here. A customer gain of 45K in just one quarter is clearly a big big step forward.
- The number of Turksat Kablo TV customers is around the same level since long tiem. It’s a total of 1.176.126 as of 2014, quite steady since a few quarters. The table below is self-explanatory. A government officer tolda that Turksat is one of the state-owned companies which is planned to be privatized within this year. This could be one of the reasons why there is not much happening in Turksat. Nevertheless, the installed base over 1 million is quite interesting. I’m pretty sure that there will be plenty of companies who will get interested in Turksat acquisition.
- Number of subs of Digiturk as of Q4 2014 is 2.942.643. The greatest player of the market is still significantly ahead of the market.
- D-Smart had a customer base of 1.048.960 in the same timeframe. D-Smart is apparently losing momentum. It has lost major sports content to Tivibu lately.
- The youngest player of the industry Filbox has just 3125 customers after 2 quarters of the launch. The value prop is selling a CAM module and paying 1 year subscription fee in advance and having access to about 20 premium Live TV channels such as SinemaTV, Da Vinci Learning, English Club TV etc.
If one looks to the global picture, the total number of subs in Turkey is around 5,5 mio as of end of 2014. Considering the number of total households is 18 million, the Pay-TV penetration rate is a bit higher than 30%. As a matter of fact, there is no much progress regarding the penetration rate over the past few years. Actually this is not much surprising because except Turkcell TV+, none of the player could manage to make significant growth over the past years. This rate is still not good enough compared to the European countries. I deeply believe that there is a huge potential for growth in Turkish pay-TV market. The key thing is to formulate the right pricing, value prop and content offering. That’s the challenge the management teams should overcome. Once this has been succeed, the level of 40% penetration is realistically achievable in a few years ahead.
Last but not least, the updated market share of the Pay-TV players is as follows;
Turkey Basketball League games will be broadcasted by Digiturk and free-to-air sports channel NTV Spor for 3 years starting from 2015-2016 season.
To recap: The split of sports content digital rights in Turkey is as follows:
- Digiturk: Turkish Premier Football League, English Premier Football League, Turkish Airlines Basketball Euroleague, Turkey Beko Basketbol League, Russian League, Brazilian League, Wimbledon and ATP1000 Masters Tennis
- D-Smart: Spanish Premier Football League (La Liga), NBA TV, Formula 1, Motor GP
- Tivibu: UEFA Champions League, UEFA Europe League, France Ligue, Italy Seria A
- Teledunya (Kablo TV): No exclusive content
- Turkcell TV+: No exclusive content
Digiturk was already the official broadcaster since past 6 years. With this new announecement it will continue for another 3 years.
It’s been made public that the contract fee is 12 million Euro / per year. While Digiturk will be broadcasting 2 games per week, the other shareholder NTV Spor will deliver another 2 games every week. Considering the enormous fee paid (321 Million UDS + VAT) for Turkish Premier Football League by Digiturk, 12 million Euro sounds pretty cost effective. Although Digiturk managed to reduce the total cost around by half, it had no more the exclusive rights which might cause customer churn in return.
TTNet has increased the minumum ADSL bandwidth from (up to) 8 Mbps to (up to)16 Mbps at an extra expense of 2 TL. The figure is expressed as „up to“. In practice, this means the internet speed may reach 8 Mbps but not guaranteed.
In the press conference, TTNet CEO has declared that fixed internet data consumption has become 38,3 GB within the first 3 months of 2014 per person. The same figure was 32,4 GB for the whole year in 2013. Obviously, there is a significant increase in terms of data consumption.
In theory, the bandwidth is told to be 18 Mbps. Nevertheless, in real life average broadband is speed is merely 4.3 Mbps in Turkey based on the Akamai State of the Internet Report. You can download the report here.
You can see the details of TTNet press conference here.
Turkweb.tv is one of the major OTT TV providers in Turkey that has the digital rights of populer series (i.e. Muhtesem Yuzyil, Leyla ile Mecnun), classical Turkish movies and series. Turkish audiences visit turkweb.tv to watch beloved series anytime, anywhere with high video quality. It’s revenue model is basically based on ads.
Last week, it’s been announced that Turkweb.tv has chosen Erstream, a Turkish-based media services provider, and Octoshape, an industry leader in cloud-based streaming technology, to improve its infrastructure in order to deliver superior TV services.
“We are excited to work with Erstream and Octoshape, two major innovators in live and on-demand streaming video technology,” said Mert Altındağ CEO at TURKWEB. “We are confident that the level of quality provided by this new initiative will motivate customers to watch more of our compelling content.”
You can reach to press release here.
According to the latest figures by BTK (Regulatory body in Turkey for Telecommunications Industry) the broadband internet techno share is as follows:
There are more than 8 million households with fixed internet connection including XDSL, Fibre and cable internet. On the other hand, based on the Akamai ‚State of the Internet‘ report the average internet speed is 4 Mbps. Major internet service providers apply a bandwidth cap of 50 GB also known as Fair Usage Policy. If the user exceed the quota within the specified period (i.e. month) the bandwidth is limited by 3 Mbps. It’s also known than more than 80 percent of the internet users are subscribed to a limitless package so that there is no specific limit of data volume to be downloaded.
As a matter of fact, there are more than 8 million households and more than 10 million screens to which OTT services with good video quality can be delivered.