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J’son & Partners Consulting presents main results of the research:Atlas of Russian Pay TV market, RESULTS OF 1H2014 & FORECAST TILL 2018.

 

PAY TV MARKET: CURRENT SITUATION, FORECAST

 

Russian Pay TV Market is one of the largest in the world: 37.1 mln. HHs connected to cable, IP and satellite TV at the end of 1H2014. For comparison – subscriber base in USA is 100 mln.HHs, penetration rate is 84%; in Poland this indicator reached 11.4 mln. HHs, penetration is 73%.

 

 

Pay TV subscriber base growth will continue, number of subscribers will increase till 45,3 mln. HHs by 2018, penetration rate will be around 83% according forecast of J’son & Partners Consulting

 

 

Russian Pay TV market volume at the end of 1H2014 was 31.9 bln. RUB. The largest market segment is cable TV (16.3 bln.RUB), next is Satellite TV (10.6 bln.RUB), IPTV (5.0 bln. RUB).

 

Pay TV ARPU will grow for 15 RUB/month and will reach 158 RUB/month in the period 1H2014 – 2018.

 

PAY TV SUBSCRIBER BASE, 2012-1H2014

 

In terms of the methodology J'son & Partners Consulting has divided TV users in the following categories:

 

Pay TV Subscribers – are the users of telecommunication services for broadcast television, where the service provider is operator giving the opportunity to watch a wide range of non-terrestrial (pay) TV channels (over 30).

 

SUBSCRIBERS OF SOCIAL LOW-CHANNEL-COUNT TV – are the users of telecommunication services for broadcast television, where the service provider is a local (country) cable operator, providing the ability to view a small number (less than 30) and mostly non-terrestrial TV (free) channels (but not providing the opportunity to watch the multichannel TV). The fee for such free channels is included in the utility bill (if any) and the tariffs are equal to the fee for telecom services (broadcasting of the national Russian TV- and radio programs).

 

Free TV subscribersare the users of analog TV broadcasting and communication services - user gets access to the public TV channels without any monthly fees.

 

In 1H2014 subscriber base of Pay TV users in Russia was 37.1 mln. HHs, which is 6% higher than in the beginning of 2014. Pay TV penetration rate was 68%.

 

Satellite TV and IPTV segments showed the highest subscriber base growth.

 

Reasons for satellite TV subscriber base growth:

 

  • low cost for services vs other Pay TV technologies;
  • independence from fixed communication network;
  • availability across the country.

 

The growth was provided mainly by the following operators: Tricolor TV, NTV+ and Orion Express.

 

Growth rate of satellite TV subscriber base was 30% in the period 2012 – 1H2014. IPTV subscriber base during the same period increased 1.7 times.

 

Development of broadband access has facilitated the vigorous growth of IPTV: according to J’son & Partners Consulting estimations, broadband access penetration rate has reached 53% in 1H2014. One of the major IPTV advantages is an opportunity to provide video on-demand services and access to interactive services. Rostelecom, Vimpelcom and MTS are leaders at Russian IPTV market.

 

Cable TV growth rate is much lower than in other Pay TV segments. Active transformation is happening in the cable TV segment due to networks’ modernization by operators and transit on DVB-C technology, which allows to provide digital TV services with additional bonus – access to such services like video on-demand, catch-up-TV etc.

 

Russian Pay TV market perspective is a gradual transit of subscribers from social low-channel-count TV to the segment of satellite TV, cable digital TV and IPTV. This tendency will be due to operators’ policy: operators will continue offering wide range of additional services, such as video on-demand, in their fight for subscribers. Small towns, with less than 100 thousand inhabitants will help to expand demand for satellite Pay TV. The following tendency will still present – development of operators’ content while waiting for transit on digital broadcasting.

 

 

 

PAY TV MARKET OPERATORS

 

Largest Russian Pay TV market players are Tricolor TV (market share – 29%), Rostelecom (21%), MTS (7%) , ER-Telecom (7%) and Orion Express (6%) according to results of 1H2014.

 

Tricolor TV subscriber base increased for 5% (1H2014) due to packaging of HD channels into service offerings, implementation of additional services and special marketing programs.

 

 

PAY TV MARKET STRUCTURE BY TECHNOLOGIES

 

According to results of 1H2014, Cable TV market share decreased for 3% to 49% vs results of 2013. Share of satellite TV was 39%, IPTV share increased till 12%.

 

 

REGIONAL PAY TV MARKETS

 

Over half of subscriber base is being generated by Privolzhsky and Central Federal Districts. Central Federal District is a leader by number of subscriber base – 35% of Russian market in general.

 

There were no major changes in distribution of subscriber base by federal districts.

 

 

KEY RESULTS AND PAY TV MARKET TENDENCIES

 

Results of 1H2014:

 

  • Pay TV subscriber base growth was 6% vs 2013. According to J’son & Partners Consulting, market growth rates will slow down till 2,5% by 2018.
  • Penetration of Pay TV services has reached 68%. The expected penetration rate will reach 83% by 2018.
  • IPTV segment showed the highest growth rate: 19% vs 2013. The lowest growth rate had Cable TV – 0,1%.
  • Satellite TV market growth was 10% vs 2013.
  • Tricolor TV (market share – 29%), Rostelecom (21%), MTS (7%), ER-Telecom (7%) and Orion Express (6%) are the largest Pay TV market players in 1H2014.

 

Market development tendencies in 2014-2018:

 

  • Market of all Digital Pay TV market technologies will increase (includingIPTV);
  • The expansion of TV channels by operators will be due to HD-packages and Digital TV channels;
  • In the fight for subscribers, operators will continue offering more additional services, such as video on-demand;
  • Operators will continue to enter in partnerships and create new services;
  • Internet will be in demand due to increasing competition from non-linear TV due to growth of penetration of broadband access services;
  • Cable TV will have decreasing growth rates in all Russian regions.
  • In general, J’son & Partners Consulting expects the growth of Pay TV market in Russia.

 

Detailed results of the research are presented in the full version of the Report: Atlas of Russian Pay TV market, 1H2014-2018 (185 p).

 

Content:

1. Introduction

2. Pay TV Service Classification

2.1. J’son & Partners Consulting methodology for subscriber base calculation (until 2012)

2.2. Arguments to support J’son & Partners Consulting methodology change

2.3. J’son & Partners Consulting methodology for subscriber base calculation (from 2012)

3. Russian Pay TV Market

3.1. Industry Quantitative Indicators 1H2014: Subscriber Base, Market Structure by Technologies, Number of Channels, Federal Districts

3.2. Description of major Pay TV operators

3.3. Profiles of major Pay TV operators, 1H2014

3.3.1. Profiles of major cable TV operators, 1H2014

3.3.2. Profiles of major Satellite TV operators, 1H2014

3.3.3. Profiles of major IPTV operators, 1H2014

3.3.4. Profiles of major OTT operators, 1H2014

3.4. Overview of regional transactions: Key M&A transactions, 1H2014

4. STB Terminals

4.1. Major STB terminal manufacturers

4.2. STB Market: current values and forecast

5. Macroeconomic Indicators of Federal Districts: Population (Urban / Rural),  Unemployment Rate, Income per Capita

5.1. Central Federal District (CFD)

5.2. Northwestern Federal District (NWFD)

5.3. Volga Federal District (VFD)

5.4. South Federal District (SFD)

5.5. North Caucasian Federal District (NCFD)

5.6. Ural Federal District (UFD)

5.7. Siberian Federal District (SFD)

5.8. Far Eastern Federal District (FEFD)

6. Pay TV Markets of Federal Districts, 1H2014: Subscriber Base, Penetration, Revenue, ARPU, Market Structure by Operators and Technologies

6.1. Central Federal District (CFD)

6.2. Northwestern Federal District (NWFD)

6.3. Volga Federal District (VFD)

6.4. South Federal District (SFD)

6.5. North Caucasian Federal District (NCFD)

6.6. Ural Federal District (UFD)

6.7. Siberian Federal District (SFD)

6.8. Far Eastern Federal District (FEFD)

7. Local Pay TV Markets, 2014: Subscriber Base, Penetration, Revenue, ARPU, Market Structure by Operators and Technologies

7.1. Moscow

7.2. St. Petersburg

7.3. Nizhny Novgorod

7.4. Samara

7.5. Kazan

7.6. Ufa

7.7. Perm

7.8. Saratov

7.9. Tolyatti

7.10. Voronezh

7.11. Rostov-on-Don

7.12. Volgograd

7.13. Krasnodar

7.14. Ekaterinburg

7.15. Chelyabinsk

7.16. Novosibirsk

7.17. Omsk

7.18. Krasnoyarsk

8. TV Content Production and Distribution

8.1. Aggregators and Distributors of TV Content for Pay TV

8.2. Audience’s content preferences

9. Service Content

9.1. Quantitative characteristics

9.2. Qualitative characteristics

10. Operators' tariff policy and offered TV channels

10.1. Operators’ Pay TV service tariffs

10.2. List of Non-Terrestrial TV channels present in Russia

10.3. Non-Terrestrial TV coverage

10.4. Channel genres popularity rating

11. Russian TV-Set Market, 2012-2018

12. Pay TV Market Trends and forecast by Technologies, 2012-2018: Market Structure and Volume in pcs. and USD, Penetration, ARPU

13. Video on Demand (VOD/PPV) Market in Pay TV, 2012-2018

14. Conclusion

15. List of companies mentioned in the report

 

LIST OF FIGURES

Figure 1. Shares of Federal Districts in the Pay TV Market in terms of the subscriber base, 2013, 1H2014

Figure 2. Reorganization of Rostelecom in April 2011

Figure 3. STB Market Dynamics, thsd. pcs., 2012-2018

Figure 4. STB Market Dynamics, RUB bln., 2012-2018

Figure 5. STB Sales Structure, pcs., 2013

Figure 6. Population rates in Federal Districts, mln., 2013

Figure 7. Urban and rural Population rates in Federal Districts, mln., 2013

Figure 8. Unemployment rate in Federal Districts, 2013

Figure 9. Income per capita in Federal Districts, 2013

Figure 10. Pay TV subscriber base and penetration rate in the Central Federal District by technologies, 2013

Figure 11. CFD’s Pay TV market structure by technologies, 1H2014

Figure 12. CFD’s Pay TV market structure by operators,  2013, 1H2014

Figure 13. Pay TV subscriber base and penetration rate in the Northwestern Federal District by technologies, 2013

Figure 14. NWFD’s Pay TV market structure by technologies,  2013, 1H2014

Figure 15. NWFD’s Pay TV market structure by operators,  2013, 1H2014

Figure 16. Pay TV subscriber base and penetration rate in the Southern Federal District by technologies, 2013

Figure 17. SFD’s Pay TV market structure by technologies,  2013, 1H2014

Figure 18. SFD’s Pay TV market structure by operators,  2013, 1H2014

Figure 19. Pay TV subscriber base and penetration rate in the North Caucasian Federal District by technologies, 2013

Figure 20. NCFD’s Pay TV market structure by technologies,  2013, 1H2014

Figure 21. NCFD’s Pay TV market structure by operators,  2013, 1H2014

Figure 22. Pay TV subscriber base and penetration rate in the Volga Federal District by technologies, 2013

Figure 23. VFD’s Pay TV market structure by technologies,  2013, 1H2014

Figure 24. VFD’s Pay TV market structure by operators,  2013, 1H2014

Figure 25. Pay TV subscriber base and penetration rate in the Ural Federal District by technologies, 2013

Figure 26. UFD’s Pay TV market structure by technologies,  2013, 1H2014

Figure 27. UFD’s Pay TV market structure by operators, 2011, 2012

Figure 28. Pay TV subscriber base and penetration rate in the Siberian Federal District by technologies, 2013

Figure 29. SiFD’s Pay TV market structure by technologies,  2013, 1H2014

Figure 30. SiFD’s Pay TV market structure by operators,  2013, 1H2014

Figure 31. Pay TV subscriber base and penetration rate in the Far Eastern Federal District by technologies, 2013

Figure 32. FEFD’s Pay TV Market structure by technologies,  2013, 1H2014

Figure 33. FEFD’s Pay TV Market structure by operators,  2013, 1H2014

Figure 34. Pay TV subscriber base and penetration rate in Moscow, 1H2014

Figure 35. Moscow’s Pay TV market structure by technologies, 1H2014

Figure 36. Moscow’s Pay TV market structure by operators, 1H2014

Figure 37. Pay TV subscriber base and penetration rate in St. Petersburg, 1H2014

Figure 38. St. Petersburg’s Pay TV market structure by operators, 1H2014

Figure 39. St. Petersburg’s Pay TV market structure by technologies, 1H2014

Figure 40. Pay TV subscriber base and penetration rate in Nizhny Novgorod, 1H2014

Figure 41. Nizhny Novgorod’s Pay TV market structure by operators, 1H2014

Figure 42. Nizhny Novgorod’s Pay TV market structure by technologies, 1H2014

Figure 43. Pay TV subscriber base and penetration rate in Samara, 1H2014

Figure 44. Samara’s Pay TV market structure by operators, 1H2014

Figure 45. Samara’s Pay TV market structure by technologies, 1H2014

Figure 46. Pay TV subscriber base and penetration rate in Kazan, 1H2014

Figure 47. Kazan’s Pay TV market structure by operators, 1H2014

Figure 48. Kazan’s Pay TV market structure by technologies, 1H2014

Figure 49. Pay TV subscriber base and penetration rate in Ufa, 1H2014

Figure 50. Ufa’s Pay TV market structure by operators, 1H2014

Figure 51. Ufa’s Pay TV market structure by technologies, 1H2014

Figure 52. Pay TV subscriber base and penetration rate in Perm, 1H2014

Figure 53. Perm’s Pay TV market structure by operators, 1H2014

Figure 54. Perm’s Pay TV market structure by technologies, 1H2014

Figure 55. Pay TV subscriber base and penetration rate in Saratov, 1H2014

Figure 56. Saratov’s Pay TV market structure by operators, 1H2014

Figure 57. Saratov’s Pay TV market structure by technologies, 1H2014

Figure 58. Pay TV subscriber base and penetration rate in Tolyatti, 1H2014

Figure 59. Tolyatti’s Pay TV market structure by operators, 1H2014

Figure 60. Tolyatti’s Pay TV market structure by technologies, 1H2014

Figure 61. Pay TV subscriber base and penetration rate in Voronezh, 1H2014

Figure 62. Voronezh’s Pay TV market structure by operators, 1H2014

Figure 63. Voronezh’s Pay TV market structure by technologies, 1H2014

Figure 64. Pay TV subscriber base and penetration rate in Rostov-on-Don, 1H2014

Figure 65. Rostov-on-Don’s Pay TV market structure by operators, 1H2014

Figure 66. Rostov-on-Don’s Pay TV market structure by technologies, 1H2014

Figure 67. Pay TV subscriber base and penetration rate in Volgograd, 1H2014

Figure 68. Volgograd’s Pay TV market structure by operators, 1H2014

Figure 69. Volgograd’s Pay TV market structure by technologies, 1H2014

Figure 70. Pay TV subscriber base and penetration rate in Krasnodar, 1H2014

Figure 71. Krasnodar’s Pay TV market structure by operators, 1H2014

Figure 72. Krasnodar’s Pay TV market structure by technologies, 1H2014

Figure 73. Pay TV subscriber base and penetration rate in Ekaterinburg, 1H2014

Figure 74. Ekaterinburg’s Pay TV market structure by operators, 1H2014

Figure 75. Ekaterinburg’s Pay TV market structure by technologies, 1H2014

Figure 76. Pay TV subscriber base and penetration rate in Chelyabinsk, 1H2014

Figure 77. Chelyabinsk’s Pay TV market structure by operators, 1H2014

Figure 78. Chelyabinsk’s Pay TV market structure by technologies, 1H2014

Figure 79. Pay TV subscriber base and penetration rate in Novosibirsk, 1H2014

Figure 80. Novosibirsk’s Pay TV market structure by operators, 1H2014

Figure 81. Novosibirsk’s Pay TV market structure by technologies, 1H2014

Figure 82. Pay TV subscriber base and penetration rate in Omsk, 1H2014

Figure 83. Omsk’s Pay TV market structure by operators, 1H2014

Figure 84. Omsk’s Pay TV market structure by technologies, 1H2014

Figure 85. Pay TV subscriber base and penetration rate in Krasnoyarsk, 1H2014

Figure 86. Krasnoyarsk’s Pay TV market structure by operators, 1H2014

Figure 87. Krasnoyarsk’s Pay TV market structure by technologies, 1H2014

Figure 88. TV content value chain and market players

Figure 89. Non-terrestrial TV audience’s content preferences, 1H2014

Figure 90. Daily average share and rating of terrestrial channels, 2012, 2013, 1H2014

Figure 91. Pay TV Channels distribution in operators’ packages by genres, 1H2014

Figure 92. Structure of non-terrestrial TV channels present in Russia by its localization, 2013

Figure 93. Number of non-terrestrial TV channels present in Russia by access technologies, 2013

Figure 94. Three-Month audience’s reach of non-terrestrial channels, %, 2013

Figure 95. Rating of channel genres popularity among non-terrestrial TV audience, %, Россия, 2013

Figure 96. Technical audience of HD TV in Russia, including cross-crossing of subscribers’ devices gategories, mln. HHs, 2013-2018

Figure 97. TV-Set market dynamics, mln. pcs, 2012-2018

Figure 98. TV-Set market dynamics, RUB bln., 2012-2018

Figure 99. Accumulated Smart TV base, mln. pcs,  2012-2018

Figure 100. Smart TV market volume, mln. pcs, 2012-2018

Figure 101. Smart TV market dynamics, RUB bln., 2012-2018

Figure 102. Pay TV subscriber base and penetration in Russia forecast, 2012-2018

Figure 103. Satellite TV subscriber base and penetration in Russia forecast, 2012-2018

Figure 104. Cable TV subscriber base and penetration in Russia forecast, 2012-2018

Figure 105. IPTV subscriber base and penetration in Russia forecast, 2012-2018

Figure 106. Pay TV market revenue and ARPU in Russia forecast, 2012-2018

Figure 107. Satellite TV market revenue and ARPU in Russia forecast, 2012-2018

Figure 108. Cable TV market revenue and ARPU in Russia forecast, 2012-2018

Figure 109. IPTV TV market revenue and ARPU in Russia forecast, 2012-2018

Figure 110. Pay TV subscriber base structure by technologies, 1H2014, 2018

Figure 111. Pay TV market revenue structure by technologies, 1H2014, 2018

Figure 112. Video on demand market volume, RUB mln., 2011-2013

Figure 113. Video on demand market structure by operators, 1H2014

Figure 114. Video on demand market volume and growth rate, RUB mln., 2013-2018

 

LIST OF TABLES

Table 1. Current dynamics of Russian Pay TV subscriber base growth by technologies, mln. HHs, 2012-1H2014

Table 2. Current dynamics of Russian Pay TV subscriber base growth by federal districts, mln. HHs, 2013-1H2014

Table 3. Russian Pay TV subscriber base structure depending on the service provision technology by major providers, mln. HHs, 1H2014

Table 4. Shareholders and Russian Pay TV brands owned by them, 1H2014

Table 5. Major players in the Russian Pay TV market, 2012-1H2014

Table 6. Key M&A transactions in the Russian Pay TV market in 2011-1H2014

Table 7. Major producers of STB subscriber receiving devices in Russia

Table 8. CFD’s macroeconomic indicators

Table 9. NWFD’s macroeconomic indicators

Table 10. VFD’s macroeconomic indicators

Table 11. SFD’s macroeconomic indicators

Table 12. NCFD’s macroeconomic indicators

Table 13. UFD’s macroeconomic indicators

Table 14. SiFD’s macroeconomic indicators

Table 15. FEFD’s macroeconomic indicators

Table 16. CFD’s Pay TV market profile, 1H2014

Table 17. NWFD’s Pay TV market profile, 1H2014

Table 18. SFD’s Pay TV market profile, 1H2014

Table 19. NCFD’s Pay TV market profile, 1H2014

Table 20. VFD’s Pay TV market profile, 1H2014

Table 21. UFD’s Pay TV market profile, 1H2014

Table 22. SiFD’s Pay TV market profile, 1H2014

Table 23. FEFD’s Pay TV market profile, 1H2014

Table 24. Moscow’s Pay TV market profile, 2013-1H2014

Table 25. St. Petersburg’s Pay TV market profile, 2013-1H2014

Table 26. Nizhny Novgorod’s Pay TV market profile, 2013-1H2014

Table 27. Samara’s Pay TV market profile, 2013-1H2014

Table 28. Kazan’s Pay TV market profile, 2013-1H2014

Table 29. Ufa’s Pay TV market profile, 2013-1H2014

Table 30. Perm’s Pay TV market profile, 2013-1H2014

Table 31. Saratov’s Pay TV market profile, 2013-1H2014

Table 32. Tolyatti’s Pay TV market profile, 2013-1H2014

Table 33. Voronezh’s Pay TV market profile, 2013-1H2014

Table 34. Rostov-on-Don’s Pay TV market profile, 2013-1H2014

Table 35. Volgograd’s Pay TV market profile, 2013-1H2014

Table 36. Krasnodar’s Pay TV market profile, 2013-1H2014

Table 37. Ekaterinburg’s Pay TV market profile, 2013-1H2014

Table 38. Chelyabinsk’s Pay TV market profile, 2013-1H2014

Table 39. Novosibirsk’s Pay TV market profile, 2013-1H2014

Table 40. Omsk’s Pay TV market profile, 2013-1H2014

Table 41. Krasnoyarsk’s Pay TV market profile, 2013-1H2014

Table 42. Video content production market players

Table 43. Aggregators (Distributors) of television content for Pay TV

Table 44. Number of TV channels in basic and extended basic packages of major pay TV operators, 1H2014

Table 45. TV Channels first aired in Russia in 2011-1H2014

Table 46. Subscriber fee by operators, per month

Table 47. List of Non-Terrestrial channels aired in Russia, 1H2014

Table 48. List of Russian HDTV Channel producers, June 2014

Table 49. Number of HDTV channels in packages of major operators

Table 50. Subscriber fee by paid HDTV channels’ operators, 1H2014

 

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.