‘N’: A New Breed of DTH Operator in Eastern Europe

‘N’, the Polish direct-to-home (DTH) platform, owned by ITI Neovision, a subsidiary of the ITI Group, one of Poland’s leading media and entertainment groups, is one of a wave of new, innovative operators proliferating in the pay-TV markets of eastern Europe. ‘N’ is making quite a splash in Poland, one of the larger markets in eastern Europe, and is targeting to have 500,000 subscribers next year, which is the platform’s break even point.

In addition, its entire customer base is able to access high-definition (HD) DTV services, making it one of the pioneers of HD services anywhere in Europe. The operator hopes to have 300,000 customers by the end of the year.

However, with two other notable DTH platforms, Polsat and Canal+ Cyfrowy in Poland, competition is tough. Maciej Sojka, president of ITI Neovision exclusively told Satellite News that there is still a large target market for the operator. He said, "There are two established players on the market. But, you have to admit that Poland is still a very large market and there is still a big part of it to be taken by someone. There is a little bit over six million households in Poland that receive 3-4 FTA channels only. There is a way to go before you can say the market is being split by different players. There is still a game going on, and the fact we start late in the competition does not mean we will not be first at the very end of the competition.”

Statistics

Poland is one of the largest potential markets for DTH services in eastern Europe. It has a population of just below 40 million people. IDATE, the French media consultancy, forecasts that by 2010 there will be 14.2 million TV households in Poland. Of these, pay-TV will account for 9.2 million households.

Progressive

The operator has tried to be very progressive in terms of its technology and wants to be at the cutting edge of offering services such as HD. "We start the platform with a new technology. We set the standard for our technology very high, so therefore it is futureproof and it gives us the ability to develop the platform in the future. All the satellite boxes we are using are MPEG4 capable. All the boxes are HD boxes and are able to receive HD signals and downconvert the HD signal into SD. The boxes are also capable of PVR and Video-on-Demand (VoD) services, which were not present on the market before we entered. All of our boxes have IP connectivity and have web browsing as a standard feature as part of the software, so they are able to connect to the Internet and serve different services over the Internet, which we are developing right now ranging from information to advertising services to other interactive services,”noted Sojka.

Sojka believes starting the investment in high-end set-top boxes is justified. He commented, "While the MPEG4 boxes are more expensive than the MPEG2 boxes, there are significant savings on the satellite space, as we are using not only MPEG4 output, but also DVB-S2 (Digital Video Broadcasting – Satellite – Second Generation) standard, which gives us more bandwidth on the same transponder and more channels. This is even when we are transmitting HD channels. It is more economical than using MPEG2/DVB-S compression.”

HD

Sojka believes the operator "is leading the discussion”in terms of HD in Poland and ‘N’ plans to be the leader in terms of providing HD services in Poland. Sojka said, "When we informed people that we were starting the platform with HD, the opinion of other platforms was that this was too soon, there was no market, therefore there is no need to do that. But customers are seeing that we are pushing everybody else into the direction of developing HD content. We have three HD channels. We see our competitors are launching HD channels and we will respond to that by launching more HD channels. We intend to be a leader in the HD market. What is also important is penetration of HD ready screens in Poland. There is now official data, which says around 500,000 to 600,000 flat screens were sold last year. This year, we think another one million additional HD ready screens will be sold. There will already be a fairly significant market of people who have HD sets, but who don’t have HD content. So, the demand on that will grow and will grow from one year to another.”

Sojka says the "economy is booming”meaning the demand for HD services is only going to get stronger in Poland. He goes as far as to say that "HD is SD”for the operator, adding, "It is a standard feature of the box. So, I would say that the HD market for us is 100 percent of our customers. This is a different approach from others who have launched SD services, and then launch HD services on top of that. We are different. This is the base of our offer. Ultimately, we want to have 100 percent of our content in HD. How long is that going to take? It may take up to ten years to get to this point. But, we say that HD is the future. You have to be future proof, even if you don’t have HD right now.”

VoD

In addition to HD services, the operator is offering advanced on-demand services to customers. Sojka admits that offering VoD services was“a painful process”in the beginning, but that the company is ramping up its activities here. He said, "Initially, we were only providing one SvoD [Subscription VoD] service to which customers can subscribe every month. In September, we launched a new VoD service, which will consist of two SVoD packages, one prepared by Universal for us called ‘PictureBox’. There will be 16 movies placed every month with four replaced every week. The second service is a service produced by us. We are also planning another on-demand package for next year. On top of that, customers will have transactional VoD. There will be about 10 to 15 movies available each month.”

IP

With the intense competition between satellite operators, it seems likely that IPTV will not make a huge impact in Poland compared to some other markets. Main Polish telco, TPSA has had its problems in rolling out IPTV services and Sojka does not see this market developing in the short-term. He commented, “We have designed the platform as a hybrid platform. The box has satellite connectivity, but it is fully functional. It could basically deliver all the services over an IP connection after a simple software upgrade. We did not do that because we don’t have the ability to deliver the link to the customer. But, I believe we are going to go to hybrid services and over the Internet we are going to deliver thin content, where as over satellite we will push the rich market. If the IP market becomes ready, we will go for that. It has been a struggle for TPSA. It will take time. But, we are prepared. We structure our deals in a content agnostic way, so we are in a position to deliver content over an IP connection today.”

The operator plans to have a progressive IP strategy. Sojka said, "We are pushing customers to plug the boxes into the Internet. For example, with our news channel, you are able to see if your box is connected to the Internet, you can read the news. Very soon, customers will be able to play out clips. They have a two-way connection. We also believe this is the new way of advertising. Every customer that has an IP connection is much more valuable to us than a regular subscriber. If you can combine rich media delivery over satellite with a return channel, you are getting the best of the mix of Internet and television.”