DTH pay-TV providers seeing uneven growth

Sky in the UK and Sky Deutschland have added 30,000 and 42,000 subscribers respectively in the first quarter of 2013. Sky is no longer breaking out DTH subscribers from those to its Now TV OTT offering so the DTH subscriber growth may have been flat or down, states MRG research. Sky in Germany has doubled the number of subscribers to its DVR service over the last year.

Sky Go, the TV Everywhere service, had 3.3 million unique users in the quarter in the UK, up from 2.6 million a year ago. While there is no charge for Sky Go, Sky also offers the Sky Go Extra service which enables downloading of content for offline viewing at a cost of £5 per month. At the end of March, Sky in the UK had 44,000 subscribers to the Sky Go Extra. In Germany, Sky Go usage climbed from 6.2 million unique sessions to 15.2 million year over year.

Canal Digital and Viasat lost 8,000 and 45,000 subscribers respectively in Scandinavia. Viasat’s Emerging Markets platform added 49,000 in Eastern Europe. Orion Express and Tricolor TV experienced strong growth in Russia in the first quarter. Orion Express added 150,000 subscribers in the quarter while Tricolor TV added 300,000. Digitalb is using Quadrille’s QuadriFast solution to push VoD content to a subscriber’s external HDD connected to their STB.

New DTH pay-TV services are launching in Eastern Europe and Latin America. Orange is applying for a licence in Romania where it would compete with three other providers. Lybid TV is in the second stage of launch in the Ukraine where it will double its channel offer to 55. Neterra has leased two transponders from Telenor for a white-label premium channel platform in Bulgaria.

Tigo has applied for a DTH licence in Paraguay. Telefonica (Movistar) and América Móvil (Claro) are planning to enter the DTH market in Uruguay. Albavisión Group launched DTH provider Qualy TV in the region in March 2013. In Ecuador, Etapa will launch a DTH pay-TV service nationally in 2013.
In India, Bharti Airtel added 207,000 subscribers to its DTH service in the first quarter to reach 8.1 million. ARPU was up slightly year over year from $3.30 to $3.40.

Monthly churn was at its lowest point in several quarters at 1.1 per cent. Revenue grew 24 per cent year over year.

While all quarterly results have not been published, MRG expects subscriber growth to be stagnant in North America and Western Europe, while the other regions of the world continue to experience subscriber growth. Revenue growth in North America and Western Europe will depend on increasing the average revenue per user (ARPU) through increased usage of services like video on demand and mobile offline viewing. This is the reason why DTH pay-TV providers are seeing the importance of connecting the set-top box to the Internet. Sky in the UK was able to grow connected boxes by 765,000 in the first quarter to reach 2.3 million out of their total 10.4 million TV subscribers. DirecTV had connected 3 million at the end of 2012 out of 20 million and is aiming to connect another 1 million during 2013.

In other parts of the world, DTH pay-TV providers are also looking to ARPU growth to provide some revenue growth, but the ARPU growth is coming from services like DVR and HD. These providers are in areas where pay-TV penetration has been low so the provider can expect subscriber growth to build revenue for the next several years. They will be competing with many others who see opportunities for pay-TV in new markets, so they will need to offer innovative services to attract and retain subscribers.

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