J’son & Partners Consulting presents short summary of research «2012-2017 Pay-TV Market Current Status and Forecasts».

Russia’s pay-TV market is one of the largest in the world, totaling 31.9 million households signed up for cable, satellite and IPTV services as of 2012.

J'son & Partners Consulting expects the growth in pay-TV subscriber numbers to continue and reach 40.2 million households by 2017, with penetration rate at 74 percent.


In the 2012 market review by J'son & Partners Consulting all TV users are divided into the following categories:


PAY-TV SUBSCRIBERS are users of communications services related to television broadcasting supplied by a provider of a large selection of mostly non-terrestrial (pay) TV channels (>30).


SUBSIDIZED LOW-CHANNEL TV SUBSCRIBERS are users of communications services related to television broadcasting supplied by an independent urban (rural) cable provider of a small selection (<30) of mostly terrestrial (free) TV channels (but not multichannel TV services) the payment for which is typically effected through a unified payment document (if any) and corresponds to the rates charged for services connected with the dissemination of nationwide TV and radio programs.


(Example: subscribers to services provided by Dolgoprudny Telecommunication Systems JSC (Dolgoprudny), Urban Cable Network Ltd (Samara), Ozyory Cable TV (Ozyory).


In accordance with J`son & Partners Consulting methodology, subscribers to subsidized low-channel TV services are not part of the pay-TV category of subscribers.


FREE TV SUBSCRIBERS are users of terrestrial analogue TV services and communications services related to television broadcasting as part of which subscribers receive access to public channels without monthly fee.


(Example: subscribers to the basic package from Tricolor TV).


2010-2012 Pay-TV Market and Subscriber Base Size

As of the end of 2012, Russia’s pay-TV subscriber base stood at 31.9 mln HH, 11 percent more than in 2011, with penetration rate at 58 percent.


The biggest growth in subscriber numbers was registered in satellite TV and IPTV segments. During 2011-2012 IPTV subscriber base increased by 1.6 times. The rate of growth of satellite television accounted for 20% over the same period.


The growth in the popularity of satellite TV services is largely due to the less expensive compared with other TV technologies services, their independence from fixed-line telephony networks, and countrywide accessibility. The company that added the majority of new subscribers was Tricolor TV – 1.9 mln of a total of 1.4 mln customers signed up in 2011.


The rapid growth of IPTV was in turn due to the increasing proliferation rate of broadband Internet access services, estimated by J’son & Partners Consulting at 48 percent in late 2012, with VOD services and online access being seen as the main advantages of IPTV. Among the leaders in the country’s IPTV market are Rostelecom, Beeline and MTS.


As the growth in cable TV user base begins to decelerate, this segment embarks on a transformational drive to upgrade its networks and adopt the DVB-C technology, which allows providers to supplement their digital TV service offerings with access to such services as VOD, catch-up-TV, etc.



Pay-TV Market Operators

The 2012 list of Russia’s largest pay-TV market players is made up of the following providers: Tricolor TV (market share of 28%), Rostelecom (21%), MTS (9%), ER-Telecom (7%), and Akado (4%).


The subscriber base of "Tricolor TV " increased by 19% in 2012 due to higher market activity. In 2012, "Tricolor TV" added foreign brands to the TV package and implemented HD-multiplex "Tricolor TV" in 1H 2012. "Tricolor TV" offers its customers the lowest monthly cost of 50 rubles per month for the extended package ("Optimum").



Pay-TV Market by Technology

In 2011, cable TV accounted for more than half of the entire pay-TV market (57%), a decline of 5 percent compared with 2011. Satellite TV’s share was 35 percent, with IPTV’s share increasing to 8%.



Pay-TV Market in Regions

With 35.5 percent of the country’s pay-TV subscribers, the Central FD is the largest in Russia.



The pay-TV highest penetration rate in 2012 was achieved in the Northwestern FD – 72.8 percent, with the lowest in the North Caucasian and Far Eastern federal districts – 29.4 and 27 percent respectively.


In 2012, the subscriber base distribution by federal districts has not changed significantly.


Key Pay-TV Market Highlights and Trends


2011 sector development highlights:

       A 11 percent growth in pay-TV subscriber base in 2012 compared with 2011. J'son & Partners
           Consulting expects the growth in pay-TV subscriber numbers to slow and settle at 2.5 percent by
       2012 pay-TV penetration rate reached 58 percent. It’s expected to reach 74 percent by 2017.
       IPTV is spearheading the industry growth with a 62 percent rise by 2012. The lowest growth
           rate of just 2 percent is observed in the cable TV segment.
       The satellite TV segment grew 20 percent in 2012, with Tricolor TV being responsible for the
           majority of newly added subscribers.


Industry trends in 2013-2017

       Digital pay-TV market will grow in the context of all available technologies.
       Capacity range of operators’ channels will be provided by HD-packages and digital TV channels.
       High demand for online video cause the increased competition from non-linear TV due to higher
           penetration of broadband services.
       The rate of growth of cable TV market will tend to decrease in all Russian regions.


Russia’s pay-TV market study highlights can be found in the 2012-2017 Atlas of Russia’s Pay-TV Market report. 2012-2017 Atlas of Russia’s Pay-TV Market report’s contents


1. Introduction
2. Classification of pay-TV services
       2.1. J’son & Partners Consulting methodology for subscriber base estimation (prior to 2012)
       2.2. Justification for revision of J’son & Partners Consulting methodology
       2.3. J’son & Partners Consulting methodology for subscriber base estimation (after 2012)
3. Russia's pay-TV market
       3.1. Sector's quantitative metrics, 2010-2011: subscriber base, market structure by
              technologies, number of channels, federal districts
       3.2. Description of pay-TV market largest providers
       3.3. Profiles of pay-TV market largest providers, 2010-2012
              3.3.1. Profiles of cable TV largest providers, 2010-2012
              3.3.2. Profiles of satellite TV largest providers, 2010-2012
              3.3.3. Profiles of IPTV largest providers, 2010-2011
       3.4. Review of regional transactions: most significant M&A transactions, 2012
4. Federal districts' macroeconomic indices: population (urban / rural), unemployment
     rate, per capita income

       4.1. Central Federal District
       4.2. Southwestern Federal District
       4.3. Volga Federal District
       4.4. Southern Federal District
       4.5. North-Caucasian Federal District
       4.6. Urals Federal District
       4.7. Siberian Federal District
       4.8. Far Eastern Federal District
5. Pay-TV markets of federal districts, 2012: subscriber base, penetration, revenue,
     ARPU, market structure by operators and technologies

       5.1. Central Federal District
       5.2. Southwestern Federal District
       5.3. Southern Federal District
       5.4. North-Caucasian Federal District
       5.5. Volga Federal District
       5.6. Urals Federal District
       5.7. Siberian Federal District
       5.8. Far Eastern Federal District
6. Local pay-TV markets, 2012: subscriber base, penetration, revenue, ARPU, market
     structure by providers and technologies

       6.1. Moscow
       6.2. St-Petersburg
       6.3. Nizhny Novgorod
       6.4. Samara
       6.5. Kazan
       6.6. Ufa
       6.7. Perm
       6.8. Saratov
       6.9. Togliatti
       6.10. Voronezh
       6.11. Rostov-on-Don
       6.12. Volgograd
       6.13. Krasnodar
       6.14. Yekaterinburg
       6.15. Chelyabinsk
       6.16. Novosibirsk
       6.17. Omsk
       6.18. Krasnoyarsk
7. TV content production and distribution
       7.1. Aggregators and distributors of TV content for pay-TV
       7.2. Audience's content preferences
8. Service content
       8.1. Quantities indices
       8.2. Qualitative indices
9. Providers' tariff policy and TV channels on offer
       9.1. Providers' tariffs for pay-TV services
       9.2. List of Russia's non-terrestrial channels
       9.3. Coverage of non-terrestrial channels
       9.4. Channel genres popularity rating
10. HDTV subscriber base evaluation per providers and TV channels
11. Russia's TV sales, 2009-2012: number of TVs per family, market structure broken
       down by (type, screen size, format, federal district), average price, top 10 regions

12. Pay-TV market trends and outlook by technologies, 2012-2017: market structure and
       size in volume and value terms, penetration, ARPU

13. Conclusion



This Information Note is Prepared by J’son & Partners Consulting, We strive to provide factual and prognostic data that fully reflect the situation and are available to us before issuing the material. J’son & Partners Consulting reserves the right to revise the data after publication of new official information by the market players.