The challenges of the Central & Eastern European Digital TV market are complex, with more than 12 countries and at least as many languages, attendees of on day 1 of Digital TV Central & Eastern Europe heard.
While OTT is growing, the domination of Netflix is far from certain. According to Andrey Kolodyuk, founder of Divan.TV: “Netflix has limited ethnic or local content. They don’t offer local TV shows and operate at a high price.”
Kolodyuk offered three pieces of advice for local operators:
- Reduce their price to US$3 to US$5 a month (below Netflix)
- Focus on local content, especially sports and factual programming.
- Bundle with linear TV to get the most popular and exclusive content.
On this last point, he noted that localised versions of reality TV shows such as the X-Factor and the Voice made up the 20 most-viewed programmes. Locally produced, Netflix doesn’t can’t get the rights for all regions, but local operators could.
Kolodyuk’s thoughts were picked up by the next keynote, Nikola Francetic, head of group content at Telekom Austria. “The specifics of CEE include small national territories with different languages, low reatail prices and low income. There is also a low awareness of SVOD,” he said.
Sporting events are again one of the main drivers of awareness of Telekom Austria’s SVOD service NOW. He cited getting the rights for the Conor McGregor vs Floyd Mayweather fight for gaining a strong foothold in Bulgaria.
One complication, he said, was the EPG. “One of the challenges is the user experience and keeping it as simple as possible. Netflix is easy to use, it only offers one type of service. Where we are offering several, this becomes complicated,” he said. Other than that, his suggestions were along the lines of Kolodyuk, adding that bundling SVOD services with existing PayTV packages was a very low-risk approach.
To close out the morning session, there was a racy panel discussion about skinny bundling that again tackled piracy, as well as the need to target a younger audience, with Constantin Lucescu, CEO Europe of OWNZONES, saying: “Operators are struggling to fit them into the ecosystems.”
One part of the answer was ubiquitous device delivery and continuation of service across several devices. This was also a key point made Richard Breskovic, marketing director, T-Hrvatski Telecom who discussed convergence. For him, “TV content and TV experience give true meaning to convergence.”
The afternoon switched tac to look at marketing and retention of customers, with Laima Zivatkauskaite, vice president of Lithuanian operator INIT describing her company’s approach to customer retention and ARPU. “It is important to advertise, but mouth to mouth conversation is very important,” she said. INIT focuses on customer service, sponsoring local events and putting itself at the heart of the community, offering cheap broadband to students to capture them young.
Andrey Popov, analyst at IHS Markit laid out the statistics of the region, including the unique fact that all platforms are showing growth. However, he pointed out that a lot of this growth was from Netflix, which could become the third biggest player in the region by the end of 2018. Despite this though, he said regional PayTV is responding rapidly to curtail the rise of Netflix.
The day closed with an interesting keynote from Michel Stefanski from Google called Tuning in TV and Technology about digital TV adopting similar ad revenue models to news and magazine websites. Look out for his interview with Digital TV Europe’s editor Stuart Thomson.