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Analysis of Digital Terrestrial TV's Use and its Influence on Pay TV

October 2015

Analytical Report (full version)

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Analytical Report (full version)

Analysis of Digital Terrestrial TV's Use and its Influence on Pay TV
Analysis of Digital Terrestrial TV's Use and its Influence on Pay TV
October 2015

Analysis of Digital Terrestrial TV's Use and its Influence on Pay TV

October 2015

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J'son & Partners Consulting analyzed the possible degree of influence of digital broadcasting on the activity of paid TV operators in large Russian cities.

 

 

Key issues of the study

 

The study provides an analysis of the mutual influence of the Russian markets of digital broadcasting and paid TV.

 

The purpose of the study is to analyze the expected use of digital terrestrial broadcasting and its impact on public consumption of paid TV services.

 

 

Practical value of the study

 

This study provides an estimate of the potential growth in demand for digital broadcasting services among the population of large cities in Russia and the customer outflow prospects of Russian telecommunications companies providing paid TV services.

 

The research results can serve as a basis of a business development strategy for the market participants.

 

 

Target audience

 

The study results and conclusions will be useful for paid TV operators, TV channels and research agencies, as well as other companies involved or potentially interested in participating in the Russian paid TV market.

 

 

Summary of the study

 

Digital terrestrial television (DTTV) is a public television, which signal is broadcast via terrestrial radio frequencies with use of multiplexes in DVB-T2 format.

 

Paid TV (PTV) is a communication service for television broadcasting which provides an opportunity to view 40 or more TV channels using analog and digital technologies, IPTV and satellite broadcasting.

 

The service development level depends on many factors: geography, economics, demography, the capability of broadcast transmitters. The penetration level of the PTV in each specific city depends on its urban infrastructure characteristics as well as the location of residential areas and real disposable incomes of the population. Densely built-up cities are characterized by the best coverage of cable television networks, and in regions with developed private sectors satellite and terrestrial TV prevail. The economic situation in the city directly affects the solvent demand of the population for entertainment.

 

On this basis J'son & Partners experts divided the cities of Russia in two groups to analyze the impact of the DTTV development on the PTV market. The first group includes cities with a population of 100,000 or more inhabitants, where the standard of living is kept at a quite high level, and the services of PTV are in great demand and are widely used. The second group includes cities with medium and low economic figures. The development level of PTV services there is also lower than in bigger cities.

 

Analysis of the data provided by FSUE “RTRS” (Russian Television and Radio Broadcasting Network) showed that as of the third quarter of 2015, the technical coverage of the Russian population by the first DTTV multiplex was 90%. Digital second multiplex TV channels are available to 56.8% of the country's population.

 

DTTV is unevenly distributed — the technical coverage in Moscow and St. Petersburg is 100%, while, for example, in Magnitogorsk and Nizhnekamsk it is 10-12%. It is worth noting that the technical coverage does not show its actual audience, it only indicates the population ability to receive digital signals.

 

Basing on the pay-TV market trends, as well as on the regional features, J'son & Partners Consulting determined the degree of influence of DTTV on the operator paid TV business development and evaluated its consumption by the city dwellers.

 

In cities such as Kazan, Orenburg and Tyumen the population actively uses PTV services and is ready to pay for it regularly. This allows us to talk about the minimum possible current and predicted (in the next 2-3 years) number of DTTV viewers — no more than 3%.

 

Source: FSUE “RTRS”, J’son & Partners Consulting

 

On the other hand, small towns with low financial welfare of residents and traditional unpopularity of PTV have a potential for growth in the size of DTTV audience in the closest 2-3 years — up to 15% of the population. For example, in Tver, with a relatively high level of PTV distribution, the population has low incomes, which can lead to an outflow of subscribers to DTTV with increasing knowledge about the availability of getting free qualitative channels.

 

 

Source: FSUE “RTRS”, J’son & Partners Consulting

 

 

Television in Russia has its own specifics which based on the peculiarities of the territory settlement, the situation on the paid television market and user preferences. Digital terrestrial television exists on a par with other technologies for delivering TV signals and, one way or another, competes for its subscribers.

 

The speed of DTTV development and its impact on the PTV market are associated with the following factors:

  •       informing the population about CETV;
  •       distribution growth of DTTV consoles;
  •       increasingpopularity of TV sets that receive digital terrestrial signals in households.

 

 

 

More detailed results of the study are presented in the full version of the report:

"Development of digital terrestrial television in Russia, 2015-2020".

 

 

Summary

 

1. Introduction

 

2. Sources and methodology of the study

 

3. Definitions used in the report

 

4. Foreign experience of transition to digital terrestrial TV

 

5. Analysis of the development of digital terrestrial TV in Russia, 2015.

5.1. Macroeconomic indicators of the Russian population

5.2. State regulation of the industry

5.3. Technical coverage and actual reception of digital television in Russia

5.3.1. Current situation of the DTTV technical coverage, 2015.

5.3.2. Penetration of DTTV in Russia in general and in cities with a population of more than 100 000 people, 2015.

5.4. The development forecast for digital terrestrial television in Russia in general and in cities with a population of more than 100 000 people, 2015-2020.

 

6. Conclusion

 

 

The newsletter was prepared by J'son & Partners Consulting. We make every effort to provide factual and forecast data that fully reflect the situation and are available at the time of the release of the material. J'son & Partners Consulting reserves the right to revise the data after the publication of new official information by individual players.

 

 

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J'son & Partners Consulting analyzed the possible degree of influence of digital broadcasting on the activity of paid TV operators in large Russian cities.