NTV Plus Exec Expects Strong Pay-TV Growth in Russia

[Satellite News 01-12-10] NTV Plus, one of a new wave of DTH operators in Eastern Europe, is aiming to be the pay-TV market leader in the lucrative Russian market, with plans to launch a 3-D TV offering.
    NTV Plus Director General Dimitry Samokhin told Satellite News that in the next few years more than half of Russia’s TV households will be connected to a non-terrestrial service. Samokhin also discussed how important it is for the company to acquire the Tricolore pay-TV platform if NTV Plus wants to get a foothold in Russia’s subscriber market.

Satellite News: What are NTV Plus’ goals for pay-TV expansion into Russia?

Samokhin: Right now, NTV Plus is concentrated on premium audiences with a high ARPU service, but we are still working on the acquisition of the Tricolore pay-TV platform. They have 7 million subscribers, but only around 4.5 million pay for services. If we can close this acquisition, this would enable us to concentrate more on the mass market. There are about 45 million TV households in Russia. I think in the next few years, more than half of that number will be connected to a non-terrestrial television service. We plan to have a huge coverage of TV households, and the acquisition of Tricolore is a key element of this strategy. This would allow to us to maximize potential growth in the market, and we hope to close this deal in the first half of this year.

Satellite News: Does your plans in Russia require you to obtain more capacity this year?

Samokhin: I think the demands for satellite capacity goes in steps. At the moment, we are happy with the capacity we have through Eutelsat. We have capacity on the W7 satellite. Even when the new satellites emerge onto the market, I don’t know whether we will need new capacity or not. A few years ago, there was a lack of capacity in the market. We saw that the satellite operators could not match the demands in the marketplace in terms of the numbers of channels that wanted access to the Russian TV market, but companies started to invest in new TV channels. I think the demand will be covered now. I don’t think demand is going to outstrip supply over the next two years.

Satellite News: Have Russian pay-TV subscribers cut back services due to the economic crisis?

Samokhin: Demand for pay-TV fell quite dramatically in the first six months of the economic crisis. People were scared to invest even in pay-TV. For the last two years, when the economic crisis has impacted Russia and the rest of the world, we have had quite a tough time gaining new subscribers. We have only started to see an increase in new subscribers again this past year, but the pace of growth of new subscribers now is greater than what we had before the crisis. I think this is due to the fact that demand was halted during the crisis, but now people are looking to buy what they wanted to buy during the crisis. I would not say it had a really deep impact on us, as I feel now that we have recovered from it, but there was an impact.

Satellite News: How long will it take for 3-D services to catch on in Russia while HD services are still being introduced?

Samokhin: We know 3-D TV sets are now being sold in Russia, so there is definitely an opportunity to tap into this. We have spent some time conducting a number of tests so we can make the TV channel watchable in households. I think now we have gone past the point of it being just a technical experiment While there may not be many subscribers who want 3-D TV right now, we want to have the ability to attract the real premium subscribers. In the next year, we have some plans to do our own 3-D TV productions. For example, we will look to cover the Russian Football league in 3-D.
    In terms of HD, our 3-D TV service is complementary for the HD package holders. From the economic point of view, we have a partner in launching this channel. We are working together with Panasonic. HD did not become something that everyone wants. For us, it has become a way to increase our ARPU and provides people with the best possible service they can have. We don’t expect to add a significant number of new HD channels over the next 12 months. We will be launching new channels, but there will not be a dramatic increase.

Satellite News: Will NTV Plus follow the model that some regional operators have established by launching expanded video-on-demand services?

Samokhin: We are working right now on a new device called a MediaBox. It is going to be a device that is going to be connected to the Internet via a Wi-Fi connection or by cable. You will be able to get television from DTH and also from the Internet, so there will be a video-on-demand service component to this. We are working on this direction, and we hope to have this on the market in the next year. This will be a big thing for us. Our subscribers tend to be the ones that have the new stuff. I believe the sales growth will be quite positive.