Pay TV revenue set to rise in Central and Eastern Europe

Global market research company Dataxis has predicted that pay-television revenues in Central and Eastern Europe are set to increase from €5.2bn in 2018 to €5.9bn over the next five years.

At the most recent Nextv Series CEE & DACH conference, many delegates felt that although this would represent a tailing off of growth rates, there remains potential in the region.

But there were contrasting views on whether revenues could still be grown on the back of exclusive sports-rights acquisitions, given the increasing cost of premium sports content. Several operators indicated that subscriber losses from missing out on rights might cost them less than holding on to them.

Anette Schaefer, vice-president of TV Business Europe at Deutsche Telekom, suggested in a panel at the conference that sharing content is now likely. Deutsche Telekom’s Romanian telco operation – Telekom Romania – has already begun this strategy and last year agreed deals in partnership with pay-television broadcaster Digi Sport and commercial broadcaster Look TV for rights to: Uefa’s club competitions, Italy’s Serie A, Spain’s LaLiga, and the domestic football league.

Similar examples of content sharing have also been seen in Cyprus and Malta.

Others continue to spend

Exclusive rights acquisitions are still the norm in the region and several operators do not conform to the view that increased expenditures cannot be successfully monetised.

In 2018, Czech pay-television broadcaster O2 has paid large rights-fee increases in order to secure exclusive rights to premium sport on pay-television, including the Uefa Champions League and domestic football. There is currently only about a 45-per-cent pay-television penetration rate in the Czech Republic, something which O2 is hoping to change.

In the Balkan markets, pay-television broadcaster Sportklub – owned by multinational telco United Group – has also continued to acquire exclusive rights and this is unlikely to change. It has most recently renewed rights for Euroleague Basketball and is set to do the same for the English Premier League in the coming months.

Several speakers at the Nextv Series conference said that variation between the markets in the regional meant that a consensus strategy was unlikely to emerge.

Local experts were also dubious of the proposition that an OTT-only player might emerge in the region. Even with the continued expansion of streaming platform DAZN, most had doubts over the viability of such a platform that has a standardised pricing structure on a pan-regional basis.

Many of these experts expect that OTT services will develop from incumbent telcos and pay-television broadcasters in each market.

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