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)
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, 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 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)
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.
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.
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.