Television and on-demand audiovisual services in the Russian - PowerPoint PPT Presentation

Television and on-demand audiovisual services in the Russian Federation A report by J’son & Partners Consulting for the European Audiovisual Observatory

Conducted for European Audiovisual Observatory 2

The structure of Russian television, 2010 Total households – 52,2 mln (100%) Households with TV – 50,6 mln (96,9%) Pay TV – 16,3 mln (31%) Satellite TV Cable TV 6,3 mln (12%) 9,6 mln (18%) IPTV Источник: J’son & Partners Consulting 0,44 mln (1%) Source: J’son & Partners Consulting Every third family in Russia watches pay TV. 3

Classification of TV services and technologies 4

Marketing and technological classification of TV services Marketing and technological classification of TV services Why is new classification necessary?  The boom of new television technologies and services, abundant new marketing terms  Linguistic incompatibility of two fixedly approaching “continents” that are terrestrial and non -terrestrial TV  Forthcoming total TV digitalization in Russia and new approaches to the commercialization of TV services The example of linguistic confusion: What is pay TV? ☹ Pay TV is television, a subscriber pays Definition in incorrect, because there is also a fee for conditional-free channels that propagate for! via networks of shared access and don’t relate to “pay TV” . ☹ Definition is twice incorrect. Firstly, there are terrestrial services of “pay TV”, for instance in Pay TV is cable, satellite and IPTV! DVB-T networks. Secondly, cable and satellite TV provide such types of services that include free channels only. ☹ Definition is incorrect, because “pay TV” services can be provided in analogue networks as Pay TV is digital TV! well. ☹ Definition is close to the real situation in the Russian TV market, however there are also Pay TV is TV with conditional access! examples of “conditional -free TV” with conditional access. 5

Marketing and technological classification of TV services Marketing and technological classification of TV services Free, Conditional-free and Pay TV services Type of TV services Free TV Free channels Conditional-free TV Pay TV Technical support Paid channels Source: J’son & Partners Consulting The main players on the conditional-free and pay TV markets In Russia there is a significant volume of analogue TV consumption. Many operators provide both digital and analogue TV services, and they all have the analogue TV subscriber base, significantly exceeding the number of digital TV subscribers. 6 Source: J’son & Partners Consulting

Маркетинговая и технологическая классификация ТВ Marketing and technological classification of TV services Linear and non-linear TV Linear TV Non-linear TV User terminals Closed systems Open systems Closed systems Open systems IPTV Analogue Cable TV VOD for TV Connected TV TV terrestrial TV Satellite TV OTT Digital TV PC, PAD IPTV Web TV VOD for PC Web-portals VOD for Smartphones TV to mobile Video to mobile smartphones Source: J’son & Partners Consulting New technologies and programs and new types of subscribers’ devices move TV market more and more actively to non-linear TV 7

Linear terrestrial TV 8

Linear terrestrial TV Analogue broadcasting in Russia Average daily audience federal channels, October, 2011 18,0 16,4 15,5 15,3 16,0 14,0 12,0 10,0 8,1 7,9 Terrestrial broadcasting is financed by state 8,0 6,0 3,8 3,4 2,3 2,1 2,1 1,9 1,8 1,6 1,6 1,3 0,9 0,8 0,8 0,7 0,2 budget and advertisers’ fees 4,0 2,0 0,0 Shares of advertising expenditures of countries, 2010 Coverage of Russian population by terrestrial analogue broadcasting Japan 4% 40% 28% 16% 12% 33,0% 5 channels Poland 56,1% 49% 21% 14% 11% 5% 4 channels 73,2% Germany 3 channels 24% 62% 5% 5% 4% 96,7% 2 channels Great Britain 29% 33% 29% 6% 3% 98,8% 1 channel Russia 54% 16% 11% 14% 5% Source: Rospechat ’ TV Print Internet Outdoor Radio 9 Source: J’son & Partners Consulting

Linear terrestrial TV Switching to digital terrestrial broadcasting Ministry of communication has expressed the need to transition to Risks of FTP implementation: digital broadcasting standards 1997  Financial risk  The first in Russia zone R & D work "Development of a Lack of overall detailed action plan of experienced digital comprehensive project to establish a  Delay of legislative regulation and absence of terrestrial TV in Nizhny system for digital television 1998-1999 Novgorod broadcasting in Russia" digital standards  Compressed transition period 2000 The first samples of the digital set-top box DVB T  Substantial technical problems with "Elf" Experimental Zone implementation of FTP for digital 2001 terrestrial and  Insufficient information campaign to support cable TV in St. the transfer to digital format Petersburg 2004 Russian Federation Government Decree "About introduction of the 2005 Russian Federation in the European system of digital television DVB» To overcome the above mentioned problems, it The first edition of the project "Development Programme in the seems appropriate to examine and use the Russian Federation the European system of TV broadcasting DVB» experience of countries that have successfully completed the transition to digital Federal Target Program (FTP) for the development of broadcasting for 2009- broadcasting. 2015 was adopted in November 2009 10

Linear terrestrial TV Partners and regional broadcasting « Single upstream » « Double upstream » Federal HeadEnd Federal HeadEnd Local Broadcasting Network Local Regional Local HeadEnd Broadcasting Broadcasting Network Network Three groups of central channels: Number of Subjects of Regional programs, TV channel - Russian universal channels (“Channel One”, “Russia 1”, NTV, “Channel partners RF hours 5”), СТС 191 83 2,6 - Federal network channels (“TV -Center ”, CTC, TNT, “REN TV”), one of Т N Т 522 79 3 which is universal - “REN TV”, R Е N-TV 1100 80 3 - Specialized terrestrial channels (“Russia 2”, “Russia K”, “ Domashniy ”, “MUZ”, MTV, “TV3”, “ Peretz ”, “Russia 24”, “ Euronews ”, “2x2”, “ Zvezda ”, Т V-Center 241 33 1,6 “ Semerka ”). Zvezda 335 77 3 Source: NAT 11

Linear non-terrestrial TV 12

Linear non-terrestrial TV Dynamics of Pay TV market volume in Russia and Current Pay TV subscribers base evolution in 2010 – H1 2011, million households Federal districts, 2009-2010 1400 2010 H1 2011 SOUTH Total 16,3 18,1 1203 6,3 7,5 Satellite FAR EAST 1200 9,6 9,9 Cable 89 mln USD 0,44 0,7 IPTV 1023 56 SIBERIA 1000 107 80 Source: J’son & Partners Consulting, companies data 47 116 URAL 95 Russian TV market structure by technologies, 2010 39 800 106 NORTH 31 249 CAUCASUS 600 224 VOLGA Analog 137 cable 85% 400 111 Satellite 34% NORD-WEST Fix 66% 411 IPTV 200 Digital 4% 329 cable CENTER 11% 0 Pay TV market 2009 2010 volume in RF, Source: J’son & Partners Consulting fieldwork data, companies data mln USD Source: J’son & Partners Consulting 13

Linear non-terrestrial TV Penetration and Pay TV operators in Russia, 2010 In Russia, the highest Pay TV penetration areas generally match the location of the economically developed centers. The only exception is the Moscow (24%), Moscow Region (33%) and Kamchatka Territory (65%). 14

Linear non-terrestrial TV Subscribers’ equipment Sales of subscribers’ equipment in physical terms by types, mln Sales of subscribers’ STB equipment in money terms, mln USD units 0,1 246 0,6 0,1 0,6 0,2 0,5 0,2 0,3 0,3 171 185 0,2 151 152 1,9 90 0,1 1,7 1,6 1,6 1,5 0,2 0,5 2007A 2008A 2009A 2010A 2011E 2012F 2007A 2008A 2009A 2010A 2011E 2012F Source: J’son & Partners Consulting Satellite Cable IPTV Source: J’son & Partners Consulting The structure of sales of subscribers’ equipment in 2010 The share of leading players of the Russian market of STB equipment Smartlabs 7% HUMAX Elecard 11% 4% Realcube COSHIP 2% 2% General Satellite ZYXEL 28% Другое Другой 2% 3% 15% AMINO ZTE 3% Digi Raum 3% Electronics 35% Source: J’son & Partners Consulting Source: J’son & Partners Consulting 15

Linear non-terrestrial TV Digital non-terrestrial linear television Operator Package Pay TV channels breakdown by provenance and localisation degree Russian- language channels The most popular translated TV channels: 19% Animal Planet, Discovery Channel, National Geographic The most popular untranslated TV channel: 55% Translated BBC World channels 26% Untranslated The most popular Russian-language TV channel: channels RBC-TV Source: J’son & Partners Consulting, company data Operator Pay TV channel bundling by categories, 2010 Adult; 1% Entertainment; Education; 20% 25% This fact highlights a considerable difference Music; 11% between Russian viewers and their Western Sports; 11% counterparts who prefer movies and sports Ethnic; 0,4% channels Movies; 13% Childish; 8% Information; 9% Source: cableman.ru 16