iKS-Consulting’s analysts made public preliminary results of the Russian Pay TV market growth in 2014.
According to the iKS-Consulting’s rating, the number of Russian Pay TV subscribers increased by 7% compared to the same period last year, and according to the preliminary results in 2014 it amounted almost 37,5 million users. The service penetration reached 67%.
The analysts consider the drivers of market growth to be the increase of the subscriber base of satellite operators, which had been developing actively in spite of difficult economic conditions. The increase in the number of IPTV operators’ subscribers, first and foremost of Rostelecom company, as well as increase of an average revenue per user (ARPU) within IPTV and digital cable TV segments. In 2014 cable television, being the largest Pay TV segment (18,4 million subscribers), showed increase by 2%. The cable TV’s growth, however, slows down, yielding to the satellite (14,8 million subscribers) and IPTV (4,4 million subscribers).
The experts point out a marked shift towards increasing share of digital cable TV. The number of cable TV subscribers experienced a 33% annual increase, while the number of analog cable TV subscribers reduced by 2%. Such an active digital cable TV growth is due to ER-Telecom company’s efforts (which released a new console this year, positioning it as a competitive advantage), as well as Akado and MTS. These operators not only connect actively new subscribers, but also switch existing customers to cable TV, thus increasing average revenue per user.
The most in absolute terms – over 1,7 million – there increased the number of Satellite Pay TV subscribers. In certain regions the Satellite TV is a dominant tecnology, for instance in the Sothern Federal District its share is 83%. The market leader by growth is IPTV segment – this tecnology subscribers’ number increased by 17% comparing with 2013.
As a result, the market structure by tecnologies changed evidently during that year. The Satellite TV’s share increased by 1 p.p. (percentage point) and totalled 39% in 2014, IPTV’s share increased by 1 p.p. (12% year’s results), and cable TV’s share reduced by 2 annual p.p. (49%).
In 2014 the market share by subscribers of the “Top-7” of Pay TV operators with over 1 million subscriber base exceeded 77% of total market. Tricolor TV operator took the first place in the iKS-Consulting’s rating with the rate of 10,9 million subscribers (9% annual growth). Rostelecom ranked second (7,8 million subscribers, 4% annual growth). MTS ranked third (2,8 million subscribers, 9% annual growth) and ER-Telecom ranked forth (2,6 million subscribers, 5% annual growth). The subscriber base increase of Orion- Express became 30% compared to 2013, which is four times more than an average market growth. Such dynamics made the company closer to ER-Telecom and MTS, but it still ranks fifth with 2,5 million subscribers in 2014. The sixth place was gained by Akado (1,15 million subscribers with 3% annual growth), and VympelKom brings up the ‘’top-7” with the rate of 1,10 million subscribers and 7% annual growth.
Apart from active Orion-Express base increasing, among the distinctive past year’s “records” the analysts mention the following operator’s results: MTS company that started losing Pay-TV subscribers in 2013, quite the contrary entered a positive trend in 2014, showing an excellent growth rate in Moscow, being one of the most competitive country’s markets (due to GPON penetration increase). NTV-Plus company, which adjusted its commercial offer at the end of 2013, also continued expanding its subscriber base in 2014 (reaching almost one million in its subscriber base).
The market shares were distributed among the players as follows: Tricolor TV – 29%, Rostelecom – 21%, MTS, ER-Telecom and Orion-Express – 7% each. The share of “others” accounts for 29% of the market.
The spread of service penetration by federal districts remains considerable – from 51% in the Far East to 79% in the Central Federal District. Such a geographical market structure grants a growth first of all to satellite operators owing to the regions of the Far East, Siberia and the South.
iKS-Consulting forecasts that by the end of 2015 the Pay TV market despite difficult economic situation will go on developing: the market volume will exceed 64 billion rubles and the subscriber’s number will reach 38,8 million. The growth is stipulated primarily by the fact that television remains an accessible service to the public, and in terms of family budget optimization the Russians will most likely refuse going once more to the cinema or coffee house.
