Tricolor TV Exec Talks Satellite Capacity Demands
[Via Satellite 12-10-13] Tricolor TV is a DTH success story in Russia. With more than 13 million subscribers, it has become one of the leading pay-TV operators in the world. The company also has an increasingly strong demand for satellite capacity, which makes it an aggressive buyer. Tricolor TV currently uses 22 transponders in total: 16 for broadcasting in the European part of Russia, and six for broadcasting in Siberia. The operator is expecting huge demands for satellite capacity over the next few years.
“We have already signed the agreement to lease satellite capacity on the Express AT1 and Express AT2 satellites. We will gain capacity in Siberia that is four times the level of available capacity now. We shall also begin to work in the Far East, where Tricolor TV is currently not present,” Sergey Stavropoltsev, Commercial Director, Tricolor TV told Via Satellite. “In my opinion, we will have three times more satellite capacity at the end of 2017 than what we have now, but it may still not be enough.”
Around three quarters of Tricolor’s subscribers pay for their satellite TV service. Tricolor still offers a “basic” package, which provides access to the main federal channels without any subscription charges throughout the period of a contract agreement.
While the company has huge subscriber numbers in Russia, one of the key challenges going forward will be to grow this number in the Far East of the country, particularly when new capacity comes on board.
“We intend to enter the Far East market in 2014. Here, at 140 degrees east, a new satellite is planned to be launched,” he said. “We have leased capacity in July. We have already performed all the necessary ‘ground’ work, prepared distribution channels, studied the whole marketing component. Therefore, when the satellite is launched, citizens of Vladivostok or Nakhodka will have the possibility to come to our dealer and to say, ‘Please connect me to Tricolor TV,’ and they will be connected – like in any other region of Russia. Moreover, the new satellite at 56 degrees east will be used for needs of our Siberian project. Siberia will get the same scope of digital television as the European part of Russia.”
Tricolor TV has also been highly progressive with its HD strategy, where things really began to happen last year. “In 2012, two events occurred which were very important for HDTV,” said Stavropoltsev. “Firstly, we introduced HD services at a competitive price. Secondly, two federal channels launched HD versions of their channels. Currently, there are more than 40 HD channels in Russia, and this number will continue to increase. We have launched five of our own HD movie channels recently. HDTV will soon become the standard option in Russia, and Ultra-HD will become a long-waited premium segment for the top tier of customers, i.e. for those who can buy the TV set with diagonal of 70-80 inches.”
Tricolor prepared its own TV channel package called ‘Maximum HD,’ which included 25 HD channels. According to Stavropoltsev, one million subscribers chose this package within six months. “A new trend in the pay-TV market was shaped. Other operators began to launch their HD-packages as well. Due to this fact, Russia has raised by 7 points in the European rating of countries with regard to the number of HDTV users within six months, and now holds eighth place,” he added.
The launch of a new movie package is a key one for the operator. The new package ‘HD Super Movie’ includes five of its own HD full-time movie channels covering premieres of new movies, family movies, and Russian movies. “А and А+ movies make up to 70 percent of the content, and many movies that were never shown on Russian TV before are also included into the content. Tricolor TV will purchase movies, including premiere ones, from Russian movie distributors and cooperate with major Hollywood studios. Currently we have agreed with Disney [for] the purchase of new movies that were not shown yet on Russian TV, and of the best blockbusters in recent years. We negotiate with MGM, Paramount and other studios as well,” said Stavropoltsev. “We intend to create the best premium movie package in Russia. It will be able to satisfy even the most sophisticated audience. The cost of the subscription for the package ‘HD Super Movie’ is 1500 Russian Rubles ($45.77) for three months or 5400 Russian Rubles ($164.76) for 12 months.”
In terms of overall market growth Stavropoltsev says he expects the Russian pay-TV market will keep growing for another three or four years. He cited several significant drivers for such growth. “The public digitalization program has artificially created a new competitive field. It has changed rules of the game. The first multiplex became a must-carry for all cable and satellite operators. Tricolor TV provided TV channels of the first multiplex (federal channels) to its subscribers free of charge in previous years, that’s why such [a] change of rules of the game has not influenced us at all, but small cable operators were compelled to restructure their operations. Furthermore, many cable operators started with analog television, and now global digitalization takes place throughout the world. The market currently changes over from traditional cable television, which dominated the market for a long time to more advanced formats like satellite television and IPTV,” he said.
What is interesting about Tricolor TV and the pay-TV market in general, is that satellite has now become such a vital part of the overall market. “If you drive around outside Moscow or Saint Petersburg: you can see with your own eyes a lot of satellite dishes on private houses, and these houses are not only elite properties, but houses that belong to medium income families as well. It should not be supposed that cable television completely prevails in large cities and satellite television is the only choice of the province. Even in the enclaves of the capital, satellite television holds key positions. For example, according to the latest data we have, there are around 500,000 subscribers of Tricolor TV in Moscow,” commented Stavropoltsev.