Ovum: Eastern Europe Pay-TV Sector in ‘Dynamic New Growth Phase’

LONDON: The technology research and advisory firm Ovum is forecasting that annual pay-TV revenue in Eastern Europe will be worth around $11 billion by 2019, as the region's TV sector enters a strong period of growth.

Ovum finds that the string of low-cost pay-TV services that launched in Eastern Europe have stimulated the region's television landscape. The firm reports that more than half of the region's homes have signed up to pay-TV services. As the market has now matured, Ovum forecasts that ARPU levels—which were previously declining—will now enjoy an uptick. ARPU in Eastern Europe is expected to rise from $9.07 per month in 2013 to $9.90 in 2019.

Adam Thomas, Ovum’s lead analyst for global TV markets, said: “Piracy and low levels of disposable income have been holding back the TV business in Eastern Europe for years. But the subscriber scale generated by these new services is now being exploited by the rollout of more sophisticated TV services. The trend we have found is a focus towards monetization and away from purely growing subscriber numbers.”

Thomas added: “Even in territories like Ukraine and Slovakia, where pay-TV subscriber growth is limited, Ovum’s research has found significant revenue growth. This is likely to be replicated across the region with operators working creatively to generate incremental revenue from existing clients by improving both content and service delivery.”

Ovum’s Oleksiy Danilin, who tracks media markets across Eastern Europe, commented: “Russian satellite service Tricolor is one of the shining examples of this trend. As the rate of subscriber additions tails off, this company will maintain revenue growth by offering subscribers premium services such as movie and HD channel bundles, which should maintain healthy ARPU growth over the next few years.”

“Ovum believes that the subscriber scale generated by these low-cost initiatives is now ripe for exploitation via the rollout of more sophisticated TV services. With the focus moving towards monetization and away from growing subscriber numbers, Ovum forecasts that pay-TV growth will be steady rather than spectacular going forward and will reach 61 percent of TV homes by 2019,” concluded Thomas.