The Italian pay-TV operator Telepiu is at the top of the tree in terms of growing subscribers among digital satellite pay-TV providers in Europe. Telepiu increased its subscriber base by more than 27 per cent in 2002, again emphasising how smart News Corp was in buying Telepiu. And News Corp’s UK satellite pay-TV provider BSkyB added the most subscribers in 2002, compared to its peers.

Overall, most countries saw pay-TV subscriber numbers increase in 2002. BSkyB still leads in Europe with 6,562,000 subscribers, increasing its subscriber base by 15 per cent in 2002. It added 846,000 subscribers in 2002, an impressive performance. If it were to grow its subscriber base by 10 per cent this year, it would smash through the 7.2 million subscriber mark. The 7 million subscriber target has always been a key one for the operator. It looks as though the operator will reach that particular landmark in the third quarter.

BSkyB’s success is not wholly unexpected, but other pay-TV operators have posted some surprisingly strong numbers. Telepiu actually lost 76,000 subscribers in the first six months of last year, but then rallied, adding an impressive 313,000 subscribers between June and September, ending the year with more than 1,750,000 subscribers. News Corp must hope that Sky Italia – the name of the company formed from the merger of Telepiu and News Corp’s Stream unit – will be able to continue to grow its subscriber base this year. The deal, which has now been officially approved by the European Commission, is a formality and Sky Italia will be working hard on a new consumer offering for later in the year, as it bids to win the hearts and minds of the Italian population.

The main challenge will be to try and wipe out the piracy culture, which has been prevalent in Italy over the last few years. There are well over a million users in Italy who are accessing pay-TV illegally, and the challenge will be to persuade this user group to start paying for service. Sky Italia will migrate to NDS’ conditional access system, which should make it increasingly difficult for pirates to operate in Italy. The recent performance by Telepiu appears to indicate that there is a great deal of potential to capture significant numbers in Italy over the next couple of years.

Telepiu was not the only surprise strong performer in Interspace’s table of pay-TV subscriber growth. German operator Premiere is continuing its rehabilitation and increased its subscriber base by 7.7 per cent in 2002. In the first six months of 2002, the operator actually lost 6,000 subscribers, but by the end of the year, it had turned things around and added just over 185,000 subscribers for the full year. The performance is especially impressive given the financial uncertainty that has surrounded Premiere in recent months.

Premiere CEO Georg Kofler has done a great job of renegotiating content deals with Hollywood studios. Despite strong free-to-air competition in Germany, Kofler has managed to improve Premiere’s prospects beyond all recognition. The challenge will be to see whether it can break through the 3 million subscriber mark this year. It would need subscriber growth of around 20 per cent to achieve this, so it may be a stretch to achieve it this year.

In France, Canal Satellite outperformed TPS in terms of subscriber growth last year. Canal Satellite saw subscriber growth of just under 13 per cent, where as TPS had growth of 7.5 per cent in 2002. The two operators added just under 350,000 subscribers between them in 2002. France is one of the only major markets left in Europe where there are two satellite platforms competing. Once deals are done in Spain and Italy, only France and the Nordic region will see different satellite platforms competing against one another.

The poorest performers in Interspace’s table of pay-TV subscriber growth were the two Spanish pay-TV operators Canal Satelite Digital (CSD) and Via Digital. Via Digital actually lost more than 30,000 subscribers in 2002 and CSD lost 9,000 subscribers. It was not a stellar year for Spanish pay-TV operators in general.

With the merger of the two operators due to be completed this summer, the management of the combined platform faces a tough task. The two platforms combined had less than 2 million subscribers at the end of 2002, a third of what BSkyB had in the UK. They will have their work cut out in a market where so far there has not been a huge appetite for pay- TV services. Certainly, another year of negative growth would leave much room for concern.

In the Nordic region (see related story, this issue) Viasat and Canal Digital added just under 200,000 subscribers between them in 2002. Canal Digital had a good year, growing its subscriber base by more than 23 per cent. Viasat showed growth of 12 per cent of the year, appearing to indicate that Canal Digital had the best of things in 2002. Viasat had issues with piracy and has recently signed a deal with NDS to change its conditional access system. If it could eradicate problems in this area, it may be able to increase its subscriber growth this year.

Overall, it was a promising year for pay-TV operators in most territories. Most operators grew their subscriber bases, and operators such as Telepiu, BSkyB and Premiere performed above expectations. If you take the two Spanish operators out of the equation, than the rest of the pay-TV operators featured here grew their subscriber bases by over 15 per cent collectively, an impressive figure. With most markets nowhere near saturation in Europe, there are still opportunities for operators to post some significant subscriber increases, particularly as operators merge, giving them leverage in terms of content negotiations, as well as getting to grips with piracy issues. It should be an interesting year.

–Mark Holmes