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.

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.

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. 

 

Last status and updates about Digiturk's sales

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)

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  • 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.

Turkcell TV+ continues its fast growth

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.

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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.

D-Smart OTT service D-Smart Blu rebranded as BluTV

D-Smart’s Blu service is rebranded as BluTV powered by a new logo and new website design.

Now, the service costs 6.9 TRY / month. There are a total of 30 Live TV channels around half of which are basically premium channels such as NBA TV, Nat Geo, Eurosport, BBC.

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In addition to Live TV channels, there is also a wide variety of VOD titles from several genres.

As a matter of fact, this simply seems yet another OTT service. So far, in Turkey OTT TV business model is yet not correctly formulized. Around 2 years ago, I’ve posted an article about the OTT players in Turkey. (link) I think none of them could achieve to build a profitable business model since then.

The real challenge for an OTT TV service is first to overcome the barrier of collecting money. if this service is an extension of an Service Provider’s existing bill, things are much more straightforward. For instance, if any OTT service is provided by an ISP or mobile operator, chances are the user will be OK to get charged an extra by the monthly bill she/he is already paying.

Nevertheless, if the service is an all-access type of service such as Netflix then the OTT player have to build an payment channel with the subscriber. To that end, the provider shall either ask the credit card info of the user or ask for mobile payment. In any case, it’s quite discouraging to fill out all the payment data. That’s why I had difficulties to feel optimistic about the OTT TV services in Turkey. I think either Tier-1 operators OTT TV service or world-leader like Netflix could compete in this industry.

 

2015 on turkishtvmarket.info

It’s been almost 2 year since turkishtvmarket.info has been launched. A variety of people from all over the world subscribed to my newsletter.  It’s really great to have such an interest on this particular area.

Herebelow you will find the most popular posts of 2015 in chronological order. This is a kind of rituel of me. This post is the 2015 version of my earlier post at the end 2014.

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Stay tuned in 2016 for getting a global picture of Turkish TV Market 🙂