It’s fair to say that Turkish Pay-TV market is saturated. There are basically 5 major players :
- Digiturk – DTH + OTT (beIN Media Group) -> 2600K subs
- KabloTV – Cable + OTT ( by government owned Turksat ) -> 1195K
- D-Smart – DTH + OTT ( Dogan Media’s DTH company) -> 934K subs
- Tivibu – IPTV + OTT (by incumbent telco Turk Telekom) -> 894K subs
- TV+ – IPTV + OTT (by leading incumbent mobile operator ) –> 436K*
In addition to these, there is another independent DTH operator called Filbox that is relatively small compared to the major players ( 50K subscribers ). In total, there are 6 million 110 thousand subscriptions. Let’s imagine that 20 % of the households have at least 2 subscriptions ( i.e. both Diguturk & TV+ or KabloTV & Tivibu) Hence the number of households with Pay-TV subscription is around 5 millions. That is to say out of 20 millions households in Turkey around 25% of them have Pay-TV subscription.
This ratio is relatively small compared to the developed Western markets where in average more than 50 % of the households have Pay-TV subscription. From my point of view, there are basically 2 main reasons of this difference:
- The purchasing power of the Turkish consumer is not at the level of Western countries. On top of this, The piracy is extremely common and consumers are avoiding to pay for the TV service and they are quite capable of consuming digital content illegally.
- Due to the significant loss in the value of Turkish Lira against USD, Pay-TV operators failed to deliver the best user experience due to the limited HW capabilities of STBs. Generally speaking, overall TV watching experience is weak and consumers had many quality issues which resulted them to be discouraged to continue to pay.
- On the contrary of developed Western countries, cable TV infrastructure is weak in Turkey. State-owned Kablo TV is not investing enough to penetrate and should be privatized for further growth.
- Greatest player Digiturk had one of the worst customer satisfaction scores in service industry in Turkey and the value of Turkish Football League is in decreasing trend. Also, the status of the ownership of Digiturk has been suspended quite long time and Digiturk’s management was not in a position to make strategic decisions. The number of Digiturk’s subscribers is stabilized around 3 million and going down in the past quarters.
- Last but least, the second largest DTH operator D-Smart is owned by Dogan Media Group. The company is owned by Media mogul Aydin Dogan. Dogan had significant conflicts with the government mostly due to the other businesses of the holding and had financial setbacks. As a consequence, D-Smart ceased to invest to Pay-TV business and lately loosing part of the customer base.
In short, the total size of pay-TV market in Turkey is stable and not growing. Actually, there are still 2 players those are constantly adding new customers :
Herebelow you can see in a consolidated manner the number of TV subscribers of Turkcell’s TV+ and TT’s Tivibu over the course of last 3 quarters starting from Q4 of 2016 to Q2 of 2017. As you would quickly notice Tivibu is growing massively on Tivibu Home segment (around 100K net addition per quarter) while TV+ is booming in OTT base (more than 250K net addition on last quarter). Basically Turkcell is focused on OTT vertical and TT is investing in new Satellite TV business. It seems reasonable to assume that in a few years Tivibu could be the second largest player following Digiturk and leaving D-Smart and Kablo TV behind. Well, at this point there are 3 key questions:
- What is the driving force of the growth of TV+ and Tivibu?
- While calculating the overall market size should one include OTT only subs as well or the home subscribers should be the reference ?
- What could fuel the growth of the overall Pay-TV market that seems lately saturated and not moving much ?
This remains to be seen but I’d try to articulate my thoughts about these key questions on my next post.
*The figures are extracted from the latest report of BTK (the regulator of Information Technologies Institute)