Helen Jameson who is a freelance journalist and writer (www.spacescript.co.uk) asked me some questions about the TV industry in Turkey for an article for the Global SatShow event. Herebelow you can see her questions and my answers.
– What are the main trends that are evident in the Turkish broadcast market at the moment? Are people watching on mobile devices?
Let’s summarize the main trends in 4 pillars:
- OTT consumption is on the rise in Turkey like the rest of the world. In Turkey, number of DSL subscribers is 7,5 million while there are 1,8 million fiber broadband users. (There are around 20 million housholds in Turkey.) On the other hand, mobile broadband penetration ratio is 62 percent. Generally speaking with its young and dynamic population Turkish people are quite engaged on OTT TV services. Also one other major shift in the industry is all the major Pay-TV operators are offering OTT extension to their legacy DTH or cable type of services. It’s fair to say that in Turkey OTT migration is more or less completed on Pay-TV operators side. OTT content watching on YouTube is increasing dramatically. Netflix is also launched last year with localization support but didn’t create much traction mostly due to the limited content depth.
- On the other hand, the popularity of Turkish Drama series is continuing. Each season, a few tens of new series are introduced to the market while only a number of them continue till the end of the season. The export of Turkish dramas to foreign countries, especially to EMEA region is booming. Turkey is number 2 exporter of local content following the USA.
- Digiturk, Turkey’s greatest Pay-TV operator with more than 3 million subscribers acquired digital rights of Turkish football league for another 4 years in the expense of 500 Million USD. Historically Digiturk owns the rights since 2000. Also Digiturk has been acquired by Qatar’s Bein Group.
- Analog switch off is still not finalized and the plan for the Digital Switchover process is still unclear.
– How is linear TV in the living room faring? Is this still important to Turkish viewers?
Absolutely! VOD consumption on big TV screen is still niche in Turkey. Turkey is clearly a satellite country with more than 70% of households are receiving TV broadcast via satellite. There are more than 10 million FTA satellite receivers installad and people are watching mostly Live TV.
– What about content? Is content very regional or is it very much a mixture of content demand and which other countries want this content?
Similar to most of the other countries, local content is key in Turkey. Although millions of people are watching on-demand US series like “Game of Thrones” , “Westworld” etc. through illegal download or Netflix type of legal OTT services, the most watched Live TV content is either Turkish dramas or Survivor type of local shows.
– Will the Turkish broadcast industry need to make upgrades to technology and services to meet demand in the country? – Is satellite an important means of delivery of Pay TV services?
- Yes, there are still SD decoders and the majority of the FTA channels broadcasted are in SD resolution. There are only a few 4K Ultra HD Live channels. In order to meet end user demand for OTT services fair usage policy is expected to be cancelled and broadband connectivity which is around 5 Mbps in average should be improved. On the other hand, 4K Ultra HD sets are deploying in massive numbers since a few years even if there is not much 4K services available.
- Satellite is definetely an important medium. In Turksat satellite there are more than 500 FTA channels and satellite reception is very common. Digiturk, D-Smart, Tivibu and Filbox are DTH operators those number of customers is covering a big portion of Pay-TV market.
– Overall, how big would you say the Turkish market is?
Turkish market is one of biggest TV market that has a significant growth potential. Turkey has a very young and dynamic population and Turkish economy seems stable and robust in most fundemental terms although Turkish Lira is performing poor against US Dollar. Pay-TV market penetration is still around 25 percent that is much less than the European coutries. IPTV service of Turkcell (Turkcell TV+) and DTH service of TT group (Tivibu) is growing fast in the past quarters in terms of net adds. There is a strong competition in the market in terms of producing appealing content and advanced technologies like 4K Ultra HD resolution, cloud-timeshift and integration of OTT services.
– What growth do you expect to see in the market in the coming months and years?
- In the pay-TV space, I think Turkcell will be investing both in OTT domain and a big TV screen domain to increase the customer base and to address untapped markets. TT group on the other hand is also playing hard to monetize the digital rights of Champion League games that is still valid till the end of 2018 season. Regarding Digiturk, following the acquisition and the ownership issue is clarified now Digiturk is going through a transformation process including rebranding of the channels as well.The other players are more or less static in the past years so I’m not expecting much move.
- On the broadcasting side, there are a few major FTA broadcasters with nice rating figures and they are making good money thanks to the advertisement. The market size will be dependent to the ad revenue and in general other digital mediums are receiving interest that could lead to decrease in TV ad revenue. Hence, they are looking alternative ways like second screens apps in order to achieve targeted, personilized ads.
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.
Netflix has launched its service in Turkey together with localized UI and dubbing/subtitle support in 21th of September. Netflix CEO Reed Hastings was himself also present at the launch event. Webrazzi, a local techno portal has made an interview with him, you can watch it here.
Together with this launch the importance of localisation has been validated to be key one more time. As a matter of fact, Netflix is accessible from Turkey since January 2016 just like the rest of the world. Nevertheless, the ranking of the download of Netflix app has been decreased to more than 500th row around the beg of the year. Then, on Sept, the UI of Netflix has become available also in Turkish, 80% of the catalog has been Turkish subtitled if not dubbed, Finally the cost of service has slightly decreased and the currency of payment has been changed to Turkish Lira from Euro. Following these 3 major changes, the iPad app download ranking has boosted from 500+ to top 50 as seen on the graph below.
On the other hand, one of the most debated topics was how widely is Netflix content available in Turkey. Let’s have a look details of this. On this link, one can see how much of percentage of the Netflix content in USA is available on various geographies of the world -while keeping content in USA as 100%.- Based on this source, one can access to 25% of the Netflix content in Turkey on TV shows space, while 10,65% of the movies content. The same ratios are around 50% in Ireland 40% in Finland and 30% in Germany. Netflix made a very sisimilarocal launch in Poland around the same time in September. In Poland, more or less the same level of content is available like Turkey.
In short, it’s a fact that Netflix Turkey could not offer the same level of content depth as Netflix USA. But still it’s not far if compared to the most of the countries in Europe. Considering, it’s simply a matter of content rights clearance I don’t see this as a blocker issue as this is core competence of Netflix. If the customer base in Turkey is growing fast, I have no doubt Netflix will continue investing here and making more more content available to Turkish audiences.
Turkcell TV+ has reached 1 million users. This is the total of OTT and IPTV active users. Today, Turkcell TV+ IPTV service is available more than 323K households. Turkcell TV+ IPTV service is only available to fiber broadband users including the 4K Ultra HD service (TRT 4K and Funbox 4K Live TV Channels and lots of 4K content on YouTube TV).
On fiber residential segment, multiple play with TV has become 34% as of Q3 2016. For details please check the presentation on Turkcell Investor Relations website.
As being part of the Turkcell TV+ Technical team, it was a day full of proud. We’ve celebrated 1 million user milestone yesterday at the office with a small party.
In the past, I’ve posted a number of articles about the growth story of Turkcell TV+ starting from the commercial launch 2 years back. If you’d like to have a look, herebelow you can find the links to previous posts.
- Turkcell introduces the future of tv with its expanded Turkcell TV+
- Turkcell TV+ continues growing full speed
- Turkcell TV+ continues its fast growth
- Turkcell TV users will watch Euro 2016 in 4K Ultra HD Resolution
- Turkcell TV acquired content rights of English Premier League for 3 years
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:
- Digiturk: 2,79 mio
- D-Smart: 931K
- Filbox: 29K
- Tivibu uydu: 116K
- 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.
Turkcell just made the commercial launch of its 4K Ultra HD service just before the kickoff game of Euro 2106. TRT 4K will broadcast 8 games (including the first game) in 4K format. TRT 4K is available at 100th channel in Turkcell TV+ channel lineup. Turkcell already made a press release about this at this link. Herebelow you can see a loose translation:
Turkcell as being the main sponsor of National Football Team will improve the watching experience for the Turkish audiences. Turkcell TV+ that is being provided via Turkcell’s fiber infrastructure will make selected games available in 4K Ultra HD format.
Thanks to the brand-new 4K Ultra HD STB that is on sale started on 3th of June, Turkcell offers 4 times better video quality. Also, Turkcell is offering access to 4K Ultra HD content via YouTube TV with the same STB.
As you probably know the acquisition of Turkey’s biggest pay-TV operator Digiturk with more than 3 mio subs by beIN Media Group was kind of never ending story. Two weeks ago the new CEO of Digiturk has provided an update about the last status of acquisition and also some additional relevant info. The link is here in Turkish. Here I summarize the key point for you: (If you need further details please drop me an email)
- We are financially in loss due to Football rights: We pay more than 400 mio USD per year for the rights but we are in loss. The interest to football is declining and it’s quite difficult to arrive to 400 mio USD on the new tender which happens to be in January 2017.
- We came to an aggrement with beIN Media Group 6 months back. All the procedures about tax has been completed. We are now in last 2 months for the sales period. It will 100 percent of the shares and the total cost will be more than 1 billion USD.
- There are a number of uncertainties about the next tender for football rights. It will happen probably in January 2017 for the period for the season starting in Q3 of 2017. It is still not definitive who will be executing the tender process, Actually Digiturk is not that much who will execute the tender but they think that whoever makes it they need to get in touch with the potential participants and develop common understanding.
- We are working around 10-11 hours in order to broadcast any football game live together with more than 60 stuff. The advertisement revenue is the most on games between Fenerbahce and Galatasaray. ( around 5 mio TRY)
- The more competition for the championships the higher our revenue becomes. If one of the big 3 teams ( Besiktas, Fenerbahce and Galatasary) gives up early on the competition Digiturk’s revenue is badly affected. We had 3,4 mio customers out of which 1,5 mio are subscribers to football package.