The digitalization of TV networks is driving a buoyant Eastern European satellite market despite uncertain economic conditions.
The financial crisis that triggered a global recession over the past 12 months has hit Eastern European countries hard. The economy in many countries in the region is facing slowing demand for goods and services, while currency exchange rates tend to reflect poor prospects of economic growth. As such, many companies and individuals are being hit by a double blow: a receding economy and burgeoning debt, often denominated in euros or U.S. dollars, that they are now struggling to repay.
This situation is giving many a headache to finance ministers and central bankers in the region. Yet, evidence seems to suggest that the satellite market is far from suffering as a result of deteriorating economic conditions. On the contrary, satellite operators are reporting what could be defined as a boom in a number of Eastern European markets. "The crisis is certainly there at an economic level, but the perception on the ground is rather different," says Martin Kubacki, managing director of Astra Central and Eastern Europe. "We see positive growth despite the crisis. We have been signing new deals and witnessing growing demand."
There are several factors that can help explain this apparent contradiction. Firstly, it should be noted that while the crisis is general and widespread, it has hit countries in varying degrees. While some nations were hit hard, others were only marginally affected. "The financial crisis is felt strongly in the Baltic states, Russia, Ukraine and Hungary. Outside of these countries, problems are not as dire," says Kubacki. This analysis seems to be shared by other market operators, as Jean-Philippe Gillet, Intelsat’s regional vice president for Europe and Middle East, suggests. "The downturn impacted some countries, but not all. In countries such as Poland and Romania we see a lot of activity," he says.
Secondly, the financial crisis actually has had the unintended consequence of driving demand for in-home entertainment and, consequently, for satellite services. "One of the consequences of the economic crisis is the fact that people do not go out or travel as much," says Kubacki. "They stay at home more and want to be entertained there. As a result, demand for television services is growing."
But above all, demand in Eastern Europe is being driven by media policy decisions and reform triggered by technological developments: i.e., the digitalization of national broadcasting systems and the demand for innovative services such as high definition (HD).
Email
Comments
Print
Reuse
