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How to exploit local advantage in CEE

AndreyKolodyukAddressing a packed audience at Digital TV Central & Eastern Europe this morning, Andrey Kolodyuk, founder of Divan.TV, painted a picture of the Central & Eastern European OTT and SVOD market as diverse with many different languages.

To understand what strategy to take, he juxtaposed global players, such as Netflix, iFlix and Amazon, with regional players including the company he founded, Divan.TV.

“Neflix has limited ethnic or local content. They don’t offer local TV shows and operate at a high price. Internet piracy is also a big issue challenging Netflix,” he told attendees at the 12th annual Digital TV Central & Eastern Europe event.

He described how their niche was “English-speaking ex-pats” and English-speaking natives and that regional regulation was a challenge to them, citing their potential withdrawal from Russia.

In contrast, companies like Divan.TV – which offers OTT services in 200 countries, 54% in CIS – bundle linear and catch-up TV. “This is often bundled with internet service provision,” he said.

“This is a very price-sensitive region, so what we see in our offering is still competitive with a standalone SVOD offering,” he explained.

The next advantage local players have is a “local content offering. In the top ten CIS shows, you see lots of localised versions of international hits, like The X-Factor, Voice etc.You cannot get these on SVOD. You need to get linear TV for this.”

Divan.TV launched its recommendation service two years ago and has seen good pick-up, with 42% of customers now using it regularly. Kolodyuk stressed the importance of recommendation services. “When you have 250 channels, you need a good recommendation service for TV content you are able to help people to navigate you help customers aggregate content in the way they want.”

He recommended the following three approaches as vital in the CIS to win business.

  1. Reduce price US$3 to US$5 a month
  2. Focus on local content.
  3. Bundle with linear TV to get the most popular and exclusive content.

“OTT and SVOD is not about the technology, it is about giving people what they want to watch,” he concluded.

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