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March/April 2018
EUROPE AN PREMIERE
MARCH 29
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pIFC NAB DTVE MarApr18.indd 1 22/02/2018 13:27Digital TV Europe
March/April 2018
Contents
20
10. The cable top ten
What are the key industry developments shaping the future of cable? Ahead of this year’s Cable
Congress in Dublin, Digital TV Europe presents its take on the top 10 priorities for the industry.
20. A sharper picture
Opinions differ about how quickly consumers are warming to UHD TV, but many hurdles still
stand in the way of the format becoming mainstream. Adrian Pennington provides an update.
26. Moving pictures
Video is expected to dominate mobile traffic in the years ahead, but much still needs to be done
to ensure a seamless video experience over mobile networks. Anna Tobin reports.
26
Regulars
2 This month 4 News digest 30 Technology 34 People 36 Final analysis
Visit us at www.digitaltveurope.com
1
p01 Contents DTVE MarApr18v3st.indd 1 23/02/2018 19:32This month > Editor’s note Digital TV Europe
March/April 2018
Issue no 337
Published By:
Cable priorities
KNect365 TMT
Maple House
149 Tottenham Court Road
London W1T 7AD
March is the month of Cable Congress, the European cable
industry’s annual get-together.
Cable remains the key distribution mechanism for TV in Europe but
Tel: +44 (0) 20 7017 5000
TV itself has become progressively less important to top-tier operators as
Fax: +44 (0) 20 7017 4953
a driver of growth in recent years.
Website: www.digitaltveurope.net
As the video landscape has become more competitive, operators have
focused on their key advantage – their network infrastructure – and on
Editor Stuart Thomson broadband access, which had delivered most of their growth. Cable TV
Tel: +44 (0) 20 7017 5314 numbers have been declining over the past decade as operators have
Email: stuart.thomson@knect365.com turned their attention to marketing higher-value premium packages and
advanced TV functionality and allowed analogue tiers to decline.
At the same time, broadband and, above all, the bundling of broadband, TV, fixed telephony
Contributing Editor Andy McDonald and mobile, has delivered higher ARPU for cable operators.
Tel: +44 (0) 20 7017 5293 In this issue of Digital TV Europe, we look at the top 10 issues facing the cable industry as they
Email: andrew.mcdonald@knect365.com pivot to address high growth areas.
Delivering higher revenue from TV itself generally means more choice and more premium
content. On the other hand, the business case for higher picture quality has proved elusive. It is
Contributors
not clear, for example, that 4K UHD TV will bring much in the way of additional revenue to TV
Kate Bulkley, Andy Fry, Adrian Pennington,
operators, broadcasters and OTT TV players. But TV service providers are increasingly using
Adam Thomas, Anna Tobin, Jesse Whittock
UHD as a marketing tool to win over high-spending customers.
One danger associated with UHD however is that consumers may be disappointed or con-
Correspondents fused because the experience of viewing falls short of expectations.
France: Julien Alliot; Germany: Dieter In this issue, we take a look at the current and future state of UHD TV, encompassing the
Brockmeyer; Italy: Branislav Pekic availability of content and services and the firming up of standards. The DVB’s UHD-1 phase
2 spec is now complete but many questions remain over how fast broadcasters and manufac-
turers will develop UHD services. What are the key elements that will determine how fast the
Commercial Director Patricia Arescy market takes off? To what extent are the technology stars now aligned and what remaining
Tel: +44 (0) 20 7017 5320 issues, if any, are likely to act as a brake on development?
Email: patricia.arescy@knect365.com With some studies predicting that half of all video consumption will be on mobile screens by
2020, video is something that mobile telcos as well as fixed line TV service providers are going
to take seriously. Most mobile video consumption is via WiFi or download-to-go, but streaming
Art Director Matthew Humberstone
over cellular networks is also likely to take some of the pie.
For mobile operators this raises a number of questions – both technical and in terms of their
Marketing Manager Marita Eleftheriadou
business model. Also in this issue of Digital TV Europe, we look at how mobile broadcast and
live streaming technology is evolving and whether this is an urgently needed technology or a
Printing Wyndeham Grange, West Sussex technology in search of a use case. l
To subscribe to this magazine or our
daily email newsletter please visit
digitaltveurope.net/registerhere
© 2018 Informa UK Ltd
All rights reserved
Stuart Thomson, Editor
Reproduction without permission is prohibited
stuart.thomson@knect365.com
Visit us at www.digitaltveurope.com
2
p02 Ed Note DTVE MarApr18v3am.indd 2 23/02/2018 19:35p03 CSG DTVE MarApr18.indd 1 22/02/2018 10:21
News > digest Digital TV Europe
March/April 2018
News digest
> 4 Deutsche Telekom: Vodafone-Liberty Global deal ‘completely unacceptable’
> 5 Fries: Liberty Global will not ‘dismantle’ European business > 6 Telefónica claims
success for originals strategy > 8 Richard: Orange will not take part in consolidation
Höttges: Vodafone-Liberty Global deal ‘completely unacceptable’
By Andy McDonald > confirmed it was in early stage Höttges: “Our offer also includes at-
discussions with Liberty Glob- Deutsche tractive TV content across all
Deutsche Telekom CEO Tim- al about potentially acquiring Telekom will screens – on any device. In Ger-
otheus Höttges has spoken “overlapping continental Euro- protest the many, for example, with Enter-
out against a potential tie-up pean assets”. deal if it’s tain TV, we aggregate linear tel-
between Vodafone and Liber- According to reports, the agreed. evision and the best streaming
ty Global-owned Unitymedia, discussions are focused on Lib- offers of our partners like Netflix
branding it “completely unac- erty’s cable assets in Germany, or Maxdome on one platform,”
ceptable” though the two companies also Telekom’s IPTV and satellite TV said Deutsche Telekom in its
Speaking on the company’s have overlapping operations in subscriber base climbed to 3.14 earnings statement.
fourth quarter and full year the Czech Republic, Hungary million at the end of 2017 – an “What’s more, since 2017, the
earnings call, Höttges raised and Romania. increase of 260,000 from 2.88 offer has included exclusive TV
concerns about market concen- Unitymedia is the country’s million a year earlier. series such as The Handmaid’s
tration in the TV space and said second largest cable operator In the rest of Europe its IPTV, Tale, Valkyrien, and Cardinal,
that a combined Vodafone and with some 13 million service satellite and cable TV base grew and our unique Telekom Sport
Unitymedia would dominate subscribers as of September to 4.24 million – up 195,000 offering.”
the German market. 2017. Vodafone is Germany’s from 4.05 million a year earlier. The company said that it
“I do not see that this kind of cable leader after it bought Kabel The majority of these additions plans to continue to expand its
concentration in the cable mar- Deutschland in 2013. were at Deutsche Telekom’s na- content portfolio in the coming
ket can be supported from reg- Separately, Deutsche Tele- tional companies in Hungary, years – for instance through its
ulatory bodies,” he said. “I don’t kom-owned T-Mobile Austria Slovakia and Greece. international partnership with
believe that Germany wants to agreed to buy Liberty Glob- In Germany, the company Netflix. It also said it plans to
go into a situation like Eastern al-owned UPC Austria late last said that it is focusing on mar- implement new operating con-
European markets where TV year for an enterprise value of keting integrated offers and on cepts like voice control through
markets are dominated by telco €1.9 billion. TV and fibre-optic lines, due to smart speakers.
players.” During 2017 Deutsche Tele- the “persistently challenging In other news, T-Mobile US
Höttges said that Deutsche kom grew its TV customer base development” in the fixed-net- announced the acquisition of
Telekom would protest the deal, by 9.0% in Germany and 4.8% work market, primarily owing online TV provider Layer3 TV in
if it is agreed. in the rest of Europe. to aggressive pricing offers of November, which closed on Jan-
Earlier this month Vodafone In its home market, Deutsche competitors. uary 22, 2018.
ongoing transformation from a online businesses, which together UHD TV channels and other
Bulgaria “traditional national broadcaster to generated SEK 991 million in sales services. The multiplex will serve
a global digital entertainer”. MTG and SEK 195 million in operating as an experimental platform for
PROG > MTG sells Nova said it will use the proceeds from income for full-year 2017. DTT broadcasters. The regulator
Modern Times Group (MTG) has the sale to invest in its digital en- envisages a launch by 2024 at the
sold its 95% shareholding in Nova tertainment business, as well as in latest with coverage of at least
Broadcasting Group in Bulgaria in a its Nordic Entertainment and MTG France 60% of the population of France.
deal that values the full business at Studios divisions – which it was due The watchdog said that it would
€185 million (SEK 1.83 billion). MTG to sell to Danish telco TDC before DTT > CSA 4K UHD TV plan work in partnership with operators
sold its Nova stake to PPF Group, the deal collapsed. Commercial Media regulator the CSA has and spectrum body the Agence
the investment company controlled media group Nova employs 650 outlined plans to develop a new Nationale des Fréquences to identi-
by Czech businessman Petr Kellner, people and the business consists digital-terrestrial multiplex that fy the resources necessary for the
with the deal forming part of MTG’s of seven TV channels and 19 will facilitate the launch of 4K multiplex, while ensuring it would
Visit us at www.digitaltveurope.com
4
p04-06,08 DTVE News Digest MarApr18 v4st.indd 4 23/02/2018 18:44Digital TV Europe News > digest
March/April 2018
have no impact on coverage of The package will also offer access to and ER-Telecom, which grew by
the country’s existing six national an on-demand catalogue of 5,000 acquiring Novosibirsk operator Events
multiplexes. The CSA said it would titles. The HBO package will cost Novotelecom and Akado’s networks
collaborate with broadcasters over PLN35 (€8.40) a month. in St Petersburg and Yekaterinburg. Cable Congress
the course of this year to identify IPTV operators accounted for the Date: 6 - 7 March
the ideal coverage area, launch bulk of the growth in subscribers, Venue: Clayton Hotel, Dublin,
date and content line-up. Russia with 900,000 new customers Ireland
signing up for IPTV services over W: tmt.knect365.com/cable-
IPTV > Pay TV growth slows the course of the year. Growth in congress
Poland The number of subscribers to pay the satellite segment increased
TV in Russia grew by 3.2% last year year-on-year, which was attributed DVB World
OTT > HBO on Ipla to 42.7 million, representing a pene- by TMT Consulting to MTS’s active Date: 12 - 14 March
Cyfrowy Polsat-owned OTT TV tration rate of 75%, according to re- promotion of its satellite service. Venue: Intercontinental Warsaw
platform Ipla has added an HBO search by TMT Consulting. Growth Satellite TV operators Tricolor Hotel, Warsaw, Poland
package to its offering as part of was driven by the big five operators, TV and Orion Express grew their W: www.dvbworld.org
an overall revamp of the service which collectively saw their pay TV respective bases at a slower rate
that sees the launch of a new bases rise by 1.5 million. This offset than previously, according to TMT Satellite 2018
user interface. Ipla is now offering declines among smaller players, Consulting. Tricolor TV remains the Date: 12 - 15 March
an HBO package comprising five which collectively lost 130,000 sub- leading player in absolute numbers, Venue: Walter E Washington
channels. The service will offer HBO scribers over the year. The leading with 12.28 million, up 1.2%, followed Convention Ctr, Wash. DC, US
HD, HBO 2 HD, HBO 3 HD, Cinemax growth operators were Rostelecom, by Rostelecom with 9.77 million, up W: 2018.satshow.com
HD and Cinemas 2 HD along with which added 600,000 customers, 4.9%. ER-Telecom takes third place,
four AXN channels – AXN HD, AXN MTS , which grew primarily through with 3.342 million TV customers Sportel Asia
Spin HD, AXN Black and AXN White. the expansion of its satellite base, after its acquisitions, up 12.1%. Date: 13 - 15 March
Venue: Shangri-La Hotel,
Singapore
Fries: Liberty Global will not ‘dismantle’ business W: www.sportelasia.com
By Stuart Thomson > Fries: national to be “a home-run investment”. NAB Show
scale is the “We think we have a compa- Date: 7 - 12 April
Liberty Global has no intention key to suc- ny that is continuing to grow Venue: Las Vegas Convention
of “dismantling” its European cess. steadily with a broadband mar- Center, Las Vegas, Nevada, US
business and remains commit- ket that’s extremely exciting,” he W: www.nabshow.com
ted to growing its business in said. He said that it was “awk-
markets where it can achieve ward” to be more specific about MIP TV
national scale, according to the company’s plans but said Date: 9 - 12 April
president and CEO Mike Fries. “We are committed to our that Liberty would either “grow Venue: Palais des Festivals,
Speaking to analysts after the core markets, where we see a with” the market or “look at op- Cannes, France
company reported mixed Q4 pathway to becoming a national tions”. W: www.miptv.com
results, Fries said that Liber- champion,” Fries told analysts. Regarding Swtizerland, Fries
ty remained committed to its He said that “scale matters said that this was a market in TV Connect
core European markets. more than ever” in Liberty Glob- need of “rationalisation” and Date: 9 - 10 May
The cable giant is in talks with al’s business and the company that Liberty had “some options” Venue: Olympia, London, UK
Vodafone about possible dispos- would look to re-balance its to consolidate or “become a W: tmt.knect365.com/tv-
als or exchanges of some assets, business in certain territories. larger player”. He said he did connect/
widely reported to include a pos- Asked specifically about not expect a significant finan-
sible disposal of its Unitymedia Liberty’s intentions in the Ger- cial turnaround for Liberty’s New Europe Market
business in Germany, where man and Swiss markets, Fries Swiss operation this year in the Date: 11 - 14 June
Vodafone, as owner of former declined to give specific indica- face of competitive challenges Venue: Dubrovnik, Croatia
Kabel Deutschland, is the major tions about the company’s plans and the company’s investment W: neumarket.com
cable player. or negotiations with Vodafone. in sport rights, and compared
Liberty already operates a However, he said that in Germa- Switzerland with the Dutch ANGA COM
joint venture – VodafoneZiggo ny the company had “optionali- market where it took the compa- Date: 12 - 14 June
– with the mobile giant in the ty” but that Unitymedia was “a ny “three years to really get the Venue: Cologne, Germany
Netherlands. great business” that had proved fixed business…back on track”. W: www.angacom.de
Visit us at www.digitaltveurope.com
5
p04-06,08 DTVE News Digest MarApr18 v4st.indd 5 23/02/2018 18:44News > digest Digital TV Europe
March/April 2018
periences to millions of viewers in country reached 3.8 million, consol-
Global Wrap South Africa Africa, with both companies having idating IPTV’s lead over other tech-
already committed “extensive nology platforms. IPTV platforms
There are now 125 million sub- OTT > Kwesé into Iflix resources” to the offering. Terms of added 464,000 subscribers over
scription video-on-demand sub- Econoet Media-owned pan-Afri- the deal were not disclosed. the year, compared with a decline
scriptions in the US, according can pay TV provider Kwesé has of 141,000 satellite subscribers.
to Futuresource. The research acquired a “significant stake” in The number of installed high-speed
firm said that while consumer Iflix Africa, the African branch of Spain broadband lines in the country
spend on SVOD is still just 10% the Asian subscription video-on-de- meanwhile grew to 9.2 million,
of the total pay TV market, mand provider. The deal deepens IPTV > Pay TV growth up 20.6%. Fibre-to-the-home de-
further growth is expected in the two companies’ existing The number of pay TV subscribers ployments accounted for the bulk
2018. 21st Century Fox is to partnership, with Kwesé and Iflix in Spain increased by 6.6% in the of additions, with 1.6 million new
launch a standalone Fox News first partnering in August to launch year to September 2017, taking connections taking the number
opinion-focused US streaming a version of the latter’s emerging the total to 6.4 million, according of fibre connections to over six
service. Fox Nation is expected markets SVOD service in sub-Saha- to statistics compiled by markets million. Overall, there were 6.1 mil-
to launch in the fourth quarter ran Africa. Iflix now has operations regulator the CNMC. Growth was lion FTTH connections, compared
of the year. Verizon has folded in Nigeria, Kenya, Ghana and South driven by the success of bundled with 5.4 million xDSL lines and 2.6
its US video streaming service, Africa, and claims an “extensive offerings. The number of quadruple million HFC connections at the end
Go90, into its Oath division, in collection” local African and and quintuple-play packages sold of September. Some 8.9 million
a move that see Go90 content international series and movies – increased by one million in the year broadband connections delivered
distributed through its other including some first-to-market and to September, taking the total to speeds in excess of 30Mbps by the
digital channels. BBC World- exclusive programming. Kwesé 11.5 million, including 5.3 million end of the third quarter, with five
wide has signed a deal with said that Iflix Africa will be its “core quintuple-play packages. The million delivering speeds in excess
Migu Video, China Mobile’s vehicle” for delivering mobile ex- number of IPTV subscribers in the of 100Mbps.
video platform that will deliver
more than 2,200 hours of BBC
content from across factual, Telefónica claims success for originals strategy
lifestyle and pre-school genres.
The deal with Migu Video marks By Stuart Thomson > customers in the fourth quarter.
Worldwide’s first deal with The TV number was boosted by
a Chinese telco. Canal+ has Telefónica claimed success for the presence of TV in all bun-
officially launched its service in its original content strategy in dled offerings. According to the
Myanmar, in partnership with its full-year 2017 results, with company, its decision to invest
local media player Forever. strong growth of its TV platform in original productions such as
The new service offers close in Spain and a ratings success flagship drama La Peste “yielded
to 80 channels covering a for flagship drama series La very positive results”. It said that
range of genres, including Peste. a differentiator had resulted in La Peste, largely viewed on-de-
eight Canal+-branded channels Telefónica’s video revenues continuous improvement to its mand, registered the largest au-
developed specifically for the grew by 7% in the fourth quar- Movistar Play offering. dience of any series broadcast by
local market. Chinese internet ter of 2017 and by 5.8% for the In Spain, Telefónica added Movistar+ to date.
search giant Baidu is planning full year on the back of a 14% 400,000 new customers over Elsewhere in Telefónica’s
a possible IPO for its video growth in its IPTV base and its the course of the year, with global footprint the picture was
streaming unit iQiyi in the US. investment in content, the com- growing take-up of its bundled mixed. In Brazil, where the
Baidu has yet to determine pany said. Video ARPU grew offering Movistar Fusión. The company is focusing on IPTV
the number of shares to be by 8% across all market while company said that it had 4.4 rather than satellite, its pay TV
sold and added that planned to churn fell marginally. million Fusión customers at the base declined by 7% but TV
remain iQiyi’s controlling share- Telefónica’s global pay TV end of the year, with 87% pene- ARPU grew by 6.1%.
holder. Liberty Latin America base grew by 2% over the course tration of its TV base. Converse- In Spanish-speaking Amer-
has acquired an 80% stake of 2017 to 8.468 million, boost- ly, some 76% of Fusión cus- ica, the TV base grew by 4%,
in Costa Rica cable operator ed by the addition of 92,000 tomers took TV as part of their with net gains of 41,000 in the
Cabletica. The all-cash deal customers in the fourth quar- bundle, up from 68% last year. fourth quarter boosting the an-
values Televisora de Costa Ri- ter compared with a net loss of Overall, Telefónica’s Spanish nual total of 113,000 net addi-
ca-owned Cabletica at CRC143 108,000 in the fourth quarter TV base stood at 3.8 million at tions, driven by strong uptake
billion (€200 million), a multiple of 2016. The company said the end of the year, up 5% year- in Peru. Pay TV revenues grew
of 6.3 times its 2017 EBITDA. that its commitment to TV as on-year, having added 81,000 by 12.8%.
Visit us at www.digitaltveurope.com
6
p04-06,08 DTVE News Digest MarApr18 v4st.indd 6 23/02/2018 18:44Q&A: Edwige Dazogbo, Edgy TV
Edwige Dazogbo, founder of Edwige Magazine and Edgy TV, talks about the international expansion of the multi-ethnic themed
lifestyle channel.
How do you rate Edgy TV’s success since its launch, both in Canada Edgy TV both online on OTT TV, on IPTV platforms and via apps as well
and internationally? as broadcast on cable pay TV platforms and satellite free-to-air, with a
Our multicultural, new media offering has international potential. We goal of reaching more than 200 millions of viewers in total.
saw growth of 200% in terms of our TV viewership following the first Our strategy is simple and successful. We have a vision and goal to
launch of the channel on one operator in December – with distribution become a major popular channel in the French-language market.
on three other cable or IPTV operators in Europe, on smart TV in the US
and two satellite launches in just three months. There is a demand in What is the channel’s mission and what makes it unique in the female-
Canada and in the international market because of the multicultural focused lifestyle space?
themes of the channel. The mission is to cover the interests of the multi-ethnic market with a
Through our cooperation with various networks, we have reached multicultural TV channel that celebrates the diversity of life through
some of the major companies worldwide that want to work with us, lifestyle: glamour, music, fashion and entertainment. It has been
so we are starting to have success. Furthermore we had a number of created specially for immigrants from Asia, Africa, Latin America and
mentions highlighting the existence of the channel in the media, and the West Indies, Europe, the Maghreb and the Middle East.
we have worked together with advertising agencies to support sales, Edgy TV offers a unique original concept and refreshing
as well as adding more and more hours of interesting content to the programming, made purely from dreams and passions. This is content
channel and producing new content in Canada. that is rare among TV content providers in the market in countries in
Africa, Europe, the Middle East and Asia.
What are your goals for the channel this year in international markets? Family and spiritual values underpin the spirit of Edgy TV. We are re-
We want to join together different cultures’ diverse ideas of beauty, introducing this culture and these values to the world.
culture and fashion. We want to create unique content, and we intend
to cater to the interests of the multi-ethnic market. The channel allows What do you see as the ideal balance between global and local
our advertisers to reach an international community. content, and to what extent will you seek to localise the channel in
This year we aim to launch the channel in the countries we have international markets?
targeted: the US, Canada, France, Belgium, Luxembourg, Switzerland, Our content is the final product of our big international vision, and
Poland, the UK, Germany, Spain, the UAE, China, India, Pakistan, includes 70% external acquisitions, with the other 30% coming from
Israel, Tunisia, Benin, Senegal, Cameroon, Congo, Mali, Burkina Faso, our own local productions in France, Canada and the US.
Reunion, Mexico, Colombia and Brazil. We also aim to launch sub- There will be general-interest programmes, music video
brands of Edgy TV: Edgy TV Music, Edgy TV France, Edgy TV India and programmes, fashion clips, films from Nollywood, Hollywood and
Edgy TV Africa. Bollywood and other ethnic-background movies, shows featuring
interviews with celebrity guests, and reality shows.
What is your distribution strategy for the channel, in terms of OTT We are addressing a market that is not yet saturated and where
versus affiliation with pay TV operators, and to what extent are you there is a strong international demand for multicultural-themed
focusing on French-language markets? programming. This is a market with a high growth potential in many
We started with cable and IPTV and we want to grow the presence of parts of the world.
p07 Edgy Q&A DTVE MarApr18.indd 1 22/02/2018 12:37News > digest Digital TV Europe
March/April 2018
in 2017. Among Viaplay’s original 64% on those devices compared to
Sweden output, Hassel was the service’s 61% for mobile as of December. UK
most-watched new series in Sweden
OTT > Viaplay viewing up and Finland; Veni Vidi Vici was the OTT > Nick Jr Play launches
Nordic subscription video-on-de- second most-watched new-series UAE Viacom-owned kids channel Nickel-
mand service Viaplay saw viewing in Demark; and Occupied season odeon has launched Nick Jr Play, its
time increase by 25% during 2017, two was the second most-watched OTT > Nick Jr Play launches interactive app aimed at pre-school-
according to stats released by new series in Norway. Overall eight Netflix has agreed its first partner- ers, outside the US for the first
parent company MTG. Customers Viaplay original productions pre- ship in the Middle East and North time. The app, which includes
spent an average of 32 hours per miered during 2017. MTG said that Africa with local operator OSN. OSN access to Nick Jr. shows, games and
month streaming Viaplay last year, Viaplay also streamed 50,000 hours customers will be able to access music, is now available in the UK
while the number of started streams of live sport in 2017, including Pre- Netflix’s content via OSN’s new and Denmark, with other interna-
rose 40.5% between 2016 and 2017. mier League and UEFA Champions set-top box, which is due to launch tional markets to follow. The app
Over the same period, MTG said the League football. In terms of viewing towards the end of the second quar- will provide access to full episodes,
total number of Viaplay customers habits, MTG said that viewing on TVs ter. They will also have the option educational games, original videos
grew by 21%, with Viaplay original or projectors surpassed mobile de- to pay for their Netflix subscription and other content. In Denmark,
productions among most viewed vices for the first time since Viaplay along with their OSN package as the app will be available via mobile
new series in each Nordic country launched in 2011, with a user base of part of a single, consolidated bill. through partnership with YouSee.
Richard: Orange will not take part in future French consolidation
By Stuart Thomson > Richard: cannot buy Free, which is in any had attractive content through
Orange will case not for sale,” he said. Any its own OCS offering and its
Orange will not participate in not be a consolidation would involve two deal with Canal+ and “did not
any future consolidation of consolidator of the other players. He said need anything else”. However,
the French multi-play telco in France consolidation still made sense in sports, Altice’s grip on Cham-
business, according to CEO because France was one of the pions League rights meant that
Stéphane Richard, despite on- only markets in Europe with a deal was desirable.
going speculation about the fu- four players, which was proba- “I don’t know if we will get a
ture of Altice France/SFR. Altice recently condemned a bly “not a sustainable situation deal or not – it’s an ongoing dis-
Speaking to analysts after the report by the right-wing weekly in the long run”. cussion,” he said.
company posted strong full- Valeurs Actuelles that it was con- Richard said Orange could Orange had 9.065 million TV
year results, Richard said that sidering a sale of all or part of “help facilitate” consolidation customers globally at the end of
Orange would not play a role in SFR, leading the publication to but would not participate in it. the year, up from 8.483 million
any future combination except publish a retraction. The inference from this is that a year earlier. The company had
“to facilitate it” and would not Richard said he did “not Orange could acquire certain reported 8.92 million TV cus-
revive anything akin to its pre- know” if there would be a de- assets that may be disposed by tomers at the end of previous
vious abortive move to acquire velopment relating to Altice in merging parties to secure regu- quarter.
Bouygues Telecom. the coming months, but that latory approval for a deal. In France, Orange had 6.861
“There is no hidden agen- “Orange will not play a front Referring to negotiations with million TV customers, up from
da and no hidden project any- role in any type of consolidation Altice to carry its pay TV chan- 6.609 million a year earlier,
where,” he said. “There is no scheme”. nels, Richard said Orange had with a modest gain in the fourth
project that makes sense for us He said that Orange’s talks decided it would be a positive quarter from the 6.84 million
today.” with Bouygues a couple of years move to take Altice’s pay TV ser- reported at the end of Septem-
Richard was responding to a ago had been engaged because vices in order to allow customers ber.
question that referenced rival the deal “was outstandingly val- “to benefit from all possible con- Richard said there would be
service provider Altice, under ue creative”. He said that there tent that matters to them, and “substantial renewal” of Or-
pressure since last year due to was no kind of operation today sport including the Champions ange’s management team after
concerns about its indebtedness “in which we could play a lead- League is clearly an attractive his leadership mandate is re-
following poor Q3 results. Altice ing role”. Orange and Bouygues content for our customers”. newed. He wants “more non-
announced a major reorganiza- had diverged and there was no He said if Orange could strike French” people, “more women”
tion of its operations including a chance of that deal being re- acceptable terms with Altice it and “more operational people”.
spin-off of its US assets in Jan- vived, he said. would take its services. In non- The new team will be unveiled
uary. “We cannot buy SFR and we sport genres, he said, Orange at the end of March.
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8
p04-06,08 DTVE News Digest MarApr18 v4st.indd 8 23/02/2018 18:44WORLWIDE DISTRIBUTION
Visit us at
MipTV #R7.D5
Sabrina Eleuteri Benedetta Migliore
Europe Area Manager Extra European Distribution
www.rai-com.com sabrina.eleuteri@rai.it benedetta.migliore@rai.it
p09 Rai DTVE MarApr18.indd 1 22/02/2018 13:29Technology focus > Cable Top 10 Digital TV Europe
March/April 2018
What are the key industry developments shaping the future of cable? Ahead of this
year’s Cable Congress in Dublin, Digital TV Europe presents its take on the top 10
priorities for the industry.
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p10-12,14-16,18-19 Cable Top 10 DTVE MarApr18v4st.indd 10 23/02/2018 18:21Digital TV Europe Technology focus > Cable Top 10
March/April 2018
and Vodafone remains the most obvious large-scale merger play in
European cable and still makes sense to many industry observers.
Liberty is, however, continuing to make moves to focus on markets
where it can realistically build a large-scale operation that can
The need for compete with telecom players. It is trying to expand its base in
Poland – by acquiring Multimedia Polska – while selling off in
scale Austria, where it has a relatively small reach.
Other moves to consolidate are taking place. Last year Basque
Country-based Euskaltel acquired Zegona Communications-owned
Telecable, another regional operator in northern Spain. Euskaltel
also announced plans to expand its reach in adjacent Spanish regions
For cable operators seeking to rival telecom players in scale
and compete at national – or international – level, the
most obvious route is to buy other operators’ networks. Indeed,
by using third-party infrastructure. IHS’s Rua Aguete believes that
the most likely long-term outcome in Spain is the acquisition of the
northern Spanish player by Vodafone, which, through its ownership
acquisitions have historically been the preferred way to expand for of the former ONO, is already the country’s major cable operator.
major players such as Liberty Global, Vodafone or Altice. At the other end of Europe, Finland’s Elisa acquired Estonian
Consolidation of the cable industry has progressed over the years cable operator Starman. In between, Germany’s Tele Columbus has
in some markets and less so in others. While the UK and France built itself into a more considerable player by acquiring Primacom
have one operator each, the industry in much of central and eastern and Pepcom.
Europe remains highly fragmented. Despite this flurry of activity, the overall pace of consolidation
While players such as Altice, Deutsche Telekom, Telekom Austria between European cable players remains relatively slow, perhaps
and TDC – and more recently, Sweden’s Tele2 with its planned indicating that bargains are hard to find. This has probably
acquisition of Com Hem – have built a mix of telecom and cable contributed to some operators turning to an alternative way of
assets, Liberty Global and Vodafone have been the major players achieving scale – building out their networks into greenfield areas.
in consolidating the European cable business in recent years and
there has been on-and-off speculation about them taking the biggest
step of all towards pan-European cable consolidation by merging
with each other. The pair are currently engaged in talks related to
specific territories, notably Germany, where both have cable assets Investing in the
and Liberty Global is the smaller player.
The groundwork for collaboration between the pair has been set network
by the pair’s VodafoneZiggo JV in the Netherlands, which represents
a different direction for M&A – namely the convergence of fixed and
mobile networks, which also underpins the Tele2/Com Hem tie-up,
a move that was likely driven by common shareholder Kinnevik,
which has committed to not sell its shares in either company for
at least six months after the deal is completed. Other fixed-mobile
mergers include Belgian operator Telenet’s acquisition of BASE and
SFR BeLux.
The network has always been the cable industry’s biggest
asset, with the hybrid fibre-coaxial (HFC) infrastructure
planted in the ground decades ago giving cable players a major
“In terms of M&A we will see more fixed-mobile convergence advantage over telecom operator rivals forced to build out expensive
mergers between mobile and fixed broadband providers,” says fibre-to-the-home or rely on other technologies that historically have
Maria Rua Aguete, executive director, technology, media and been less able to deliver ultra-fast services to consumers.
telecom at IHS Markit. “These mergers are often motivated by the The quality of cable networks is nevertheless uneven and cable’s
desire to offer integrated solutions, consisting of fixed broadband technical reach is limited compared with that of incumbent telcos.
and telephony, pay TV and mobile services. Quad play is critical Operators have therefore continued to invest in upgrading out-of-
to retain customers and achieve growth, hence the intense M&A date plant to deliver high-speed services. However, the cost is lower
activity between telcos and cable operators.” than planting fibre in the ground from scratch, which has remained
A broader tie-up between Liberty, which this year split off its Latin a key advantage for cable operators – which generally have access to
American interests and agreed the sale of UPC Austria to T-Mobile, more limited financial resources than big telcos.
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11
p10-12,14-16,18-19 Cable Top 10 DTVE MarApr18v4st.indd 11 23/02/2018 18:21Technology focus > Cable Top 10 Digital TV Europe
March/April 2018
Operators with access to sufficient resources such as Liberty TV through IP, but the presence in the network of legacy RF set-top
Global have also sought to expand their footprint by building out boxes still acts as a brake on this.
both HFC and fibre networks to greenfield areas, a strategy that
has been aided by technological advances that have reduced the
costs, helping to make build-out strategies a feasible alternative to
acquisition of other operators, which, conversely, has become more
expensive. Multiplay
According to Cornel Ciocirlan, chief technology officer, Europe at
cable technology provider Arris, cable operators are not only seeking bundling
to make the most of their existing HFC infrastructure but are in
some cases actively building out HFC rather than FTTH to new-
build areas. “We still see HFC being actively built – operators are
building new HFC plant. They have a choice, and all being equal
they will build out fibre. But all is not always equal. The cost of an
HFC home is much less, and from a capex perspective operators
want to make every dollar or euro count,” he says.
In fact, says Ciocirlan, operators are using a mix of technologies
Bundling TV, broadband, and telephony has for
years been a competitive way to upsell
existing subscribers to new products, and convergence remains a
in new-build areas. They are often collaborating with housing strong strategy for European service providers today.
associations and builders who require fibre as a marketing In February of this year, Vodafone confirmed that it was in early
tool. Operators are sometimes using the RF-over-glass (RFoG) stage discussions with Liberty Global about potentially acquiring
technology that enables them to maintain a single service delivery “overlapping continental European assets”. According to reports,
platform across both HFC and fibre networks. the discussions were focused on Liberty’s cable assets in Germany,
Speaking at the UBS Annual Global Media and Communications which are run by Unitymedia – the country’s second largest cable
conference at the end of last year, Liberty Global president and CEO operator. Vodafone is already Germany’s cable leader following
Mike Fries said that new build of network in areas where it does not its acquisition of Kabel Deutschland in 2013.
already have a presence is a key growth opportunity for the operator, Speaking at the UBS Annual Global Media and Communications
which was “hitting the marks” in terms of the targets the company conference in December, Liberty CEO Mike Fries commented
has set. He said Project Lightning – the name of the company’s that “national scale is what matters in Europe” and said Liberty
network build-out in the UK – was delivering in terms of costs and would be a “buyer or a seller” in markets where it lacked scale.
rising revenues. “Lightning is doing everything we asked it to do,” Shortly after T-Mobile Austria agreed to buy Liberty Global-owned
he said. cable operator UPC Austria for an enterprise value of €1.9 billion,
Crucially, said Fries, Liberty was focused on “long term enduring transforming it in the process from a mobile to a quad-play provider.
growth” rather than short-term cash flow, which is why it is investing Speaking on Liberty’s recent fourth quarter earnings call,
in new network areas. Fries said that he has no intention of dismantling the company’s
Operators with more limited resources and scale than Liberty European business and stressed that he remains committed to
Global also know that extending their reach is crucial to competing growing its business in markets where it can achieve national scale.
effectively with better-resourced telcos. In a number of markets This latest burst of activity is the latest in a long line of similar
with fragmented cable infrastructures mid-sized operators have deals in the European market. In January Swedish telco Tele2
sought to forge partnerships with smaller local players to offer their agreed to buy local cable operator Com Hem in a merger agreement
services across the local network in arrangements that fall short of that will establish Tele2 as a major integrated mobile and fixed line
outright acquisition. operator. A year earlier Liberty and Vodafone completed the creation
In their existing network footprint, meanwhile, operators are of their Dutch joint venture, establishing a converged fixed and
seeking to reclaim bandwidth in order to offer higher-speed mobile communications operator to compete with KPN. In early
broadband service to compete more effectively with rival providers. 2016, meanwhile, BT closed its £12.5 billion (€16.7 billion) buyout
This trend both fuels and has been fuelled by cable losing TV of UK mobile operator EE to make its mark on the quad-play market.
subscribers to IPTV and satellite, while gaining new broadband While more deals of this type look likely to follow, it is worth
customers. Many operators have now moved to shut down analogue considering that the future of bundling is likely to go beyond just
services, losing some legacy customers but enabling them to focus offering TV, internet and phone services. “I expect the traditional
on higher-paying bundled offerings. The ultimate goal is to deliver triple and quad-play bundled strategies to continue in tandem with
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12
p10-12,14-16,18-19 Cable Top 10 DTVE MarApr18v4st.indd 12 23/02/2018 18:21Q&A: Oliver Soellner, ABOX42
Oliver Soellner, member of the management board at ABOX42, talks about the advantages of turnkey solutions for TV service providers.
What are the main challenges facing telecom operators in launching from someone who is a specialist in his field. It is easier, faster and
TV services and keeping them up-to-date? cheaper to rely on the trusted technologies of a turnkey IPTV solution
The TV market is developing very fast nowadays, so there is a constant than investing lots of time and money in operators’ own developments
need to innovate and keep up with the latest developments, always a and investigations.
need to observe the latest technologies and trends on the market. This is Next to cost, a turnkey solution reduces the overall project complexity
quite new for traditional operators (e.g. cable operators) who are not used for the operator, allows the operator to grow seamlessly and benefit
to acting agile and keeping up with the market and competitors, since in from a steady evolvement of features and functions.
the past TV services were mainly linear, without much interactivity. Last but not least a turnkey solution takes away a lot of hassle from
Today there are many new possibilities in terms of features and services operators maintaining the solution including all applications, which
(network PVR, restart TV, on-demand services, OTT services), which requires steady development to maintain compatibility of all apps (e.g.
requires a much more flexible TV solution including a strong set-top box iOS, Android, Windows).
platform to be able to introduce new features over time and keep up with
technology trends. To what extent are turnkey solutions more suited to the needs of small
and medium-sized operators, and to what extent are larger players
What are the main technology innovations that are changing the way likely to go down this route?
IPTV systems are implemented and what impact will they have? We have seen a clear trend for a couple of years already towards white
Looking at recent technology innovations, UHD/4K seems to be a main label multiscreen IPTV and hybrid solutions, and not only with smaller/
driver for change these days. UHD/4K requires changes in the complete medium size operators who could not handle a complex project and do
content delivery system, starting with the introduction of H.265/HEVC not have the budget for it.
for more efficient content distribution and enhanced content security Even larger operators are increasingly considering hosted and
requested by content owners. These technology changes have an impact managed solutions, since the history shows that many operators
on the whole production and delivery system (production equipment, struggled with their legacy solutions by managing a complex project
encoding, transcoding, streaming and end-user devices such as the in-house, which has a lot of room for failure and requires quite a
operator set-top box). Such change needs solid planning and has quite strong in-house product management and organisation with various
an impact on operator TV solutions. stakeholders.
Apart from UHD/4K we see a major trend on the operator side to With a turnkey solution the project complexity is much reduced, which
provide comprehensive multiscreen services on multiple devices, which allows the operator to focus on his major strength in marketing and sales.
also allow interactions between mobile devices and the set-top box
e.g. for content discovery on mobile, playback on TV, essential control How much flexibility does a turnkey offering give to service providers
functions as well as remote programming of recordings. to differentiate the user experience and their overall offering?
Due to the fact that infrastructure is evolving fast and operators are In the past one of the arguments of larger operators made against white
able to offer decent broadband connections on DSL and fibre, more and label/ turnkey solutions was that these solutions do not offer enough
more end-customers are getting access to new IPTV and hybrid solutions. customisation possibility. Today, this is also becoming less of an issue,
since most modern TV middleware solutions are browser-based and
What are the main advantages for operators in choosing a turnkey do offer a high level of flexibility for customisation and UI changes to
IPTV system as against developing a platform using multiple suppliers? achieve a unique user experience across all screens, while still leveraging
Choosing a system from a trusted partner means choosing a solution the advantages of a white label/turnkey solution.
p13 ABox42 Q&A MarApr18.indd 1 23/02/2018 15:13Technology focus > Cable Top 10 Digital TV Europe
March/April 2018
the growth of more ‘evolved’ bundles that may include newer OTT when choosing a multi-play operator,” says Simon Trudelle, senior
elements but will also comprise different mixes of the traditional director, product marketing at Nagra.
service components,” says Jonathan Doran, principal analyst at The content protection and multiscreen television solutions
Ovum and an expert in telco video and pay TV operator strategies. company works with cable customers around the world – including
“We can expect more operators to drop fixed line rental, while Altice Group, Net Serviços and StarHub – which have deployed
some will cater for cord-shavers and cord-nevers with dual offerings Nagra UX solutions to introduce new on-demand and multiscreen
based around fixed and mobile broadband but without the enforced features and capabilities.
pay TV component. Bundling options will become increasingly “From easily providing access to on-demand content, including
modular so that, for example, there is a base of single or dual-play start-over, catch-up TV and cloud DVR, to onboarding OTT apps like
broadband, with the choice to add pay TV or online video: a kind of Netflix, or providing linear channels delivered to any screens, our
semi-a la carte scenario.” customers have successfully evolved their platforms to provide more
convenience and better access to content for their subscribers,” says
Trudelle.
With much set-top box functionality moving to the cloud, it is
important that operator-provided devices integrate new capabilities
like personalisation, voice recognition, and smartphone-based
Next-gen TV remote controls and video casting, while also providing access to
OTT app stores.
“There is an innovation gap building up in the industry, and there
is a real risk for cable operators in particular – especially the mid
and small-size ones in Europe and elsewhere,” warns Trudelle.
He claims that distributing a bundle of linear channels is “simply
not sufficient anymore to guarantee TV revenues”, with younger
In an increasingly competitive content landscape, user
experience is arguably becoming a key point of differentiation
among operators. But to what extent do advanced TV features and
viewers in particular increasingly deciding to access TV and video
services through OTT players. He suggests that while incumbent
cable operators need to evolve legacy infrastructure, they should
set-top box developments matter to customers? take a cloud platform approach to compete with fast-moving over-
In its most recent earnings announcement, Liberty Global said the-top competitors.
that in Q4 2017 it added 210,000 subscribers to its advanced TV
platforms – Horizon, Horizon Lite, TiVo, Virgin TV V6 and Yelo TV.
The additions still only took its advanced TV total to 43% of its total
cable video base, but was a significant positive in a quarter where its
overall video customer number dropped by 54,500. Investing in
Liberty-owned UK operator Virgin Media announced in January
that it would offer customers a free upgrade to its high-end V6 content
set-top box – in what it described as one of the largest customer
upgrade programmes ever carried out in the UK. Virgin Media said
that by the end of the year it expects the majority of its TV customers
to have a V6 box – a premium, 4K-ready device that allows users to
record up to six programmes while watching a seventh recording
or stream.
Pushing TV customers to their latest and most impressive TV
experience makes sense for operators in today’s hyper-competitive
Investing in content is one way to differentiate
a pay TV offering. But what content
works best and is this always the right approach for an operator to
media landscape. Virgin Media claims that V6 customers spend on take?
average two hours longer each week watching TV and are more than Premium sports rights have long been a major draw for viewers
twice as likely to watch a box set – an important factor when research and a key investment for pay TV operators. While major online video
shows that linear TV viewing is down overall as the popularity of on- giants like Netflix and Amazon have – for the time being at least –
demand platforms increases. focused their efforts around scripted content, live sport remains an
“As consumer expectations keep rising and differentiation based important reason for choosing and remaining committed to a pay
on content alone is likely to become more challenging in most TV operator.
markets, UX is one of the key factors that consumers will consider Another battleground that is of increasing importance, at least for
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p10-12,14-16,18-19 Cable Top 10 DTVE MarApr18v4st.indd 14 23/02/2018 18:21Digital TV Europe Technology focus > Cable Top 10
March/April 2018
some operators, is high-end drama.
In Spain, Telefónica has invested €70 in Movistar+ original
productions and it recently announced plans to launch these series
in 12 countries across central and south America – airing them
on a new Movistar Series channel and across its Movistar TV and Embracing OTT
Movistar Play platforms.
Elsewhere, Liberty Global recently announced its second move
into original drama, partnering with All3Media International and
Amazon Prime Video to produce The Feed – a London-based series,
set in the near-future.
Sky, meanwhile, said on its most recent earnings call that
viewing of Sky channels had increased by 6% following both critical
successes and record audiences for Sky Original productions
like Riviera and Tin Star.
Virgin Media in the UK was the first pay TV operator
to let Netflix on its platform back in 2013. The
cable provider initially offered the service to a limited number of
Ed Border, principal analyst, Ampere Analysis, says that pay homes on its Virgin Media TiVo boxes, before rolling it out to all
TV operators can market themselves via a mix of two things – TiVo customers. Com Hem was Netflix’s second cable provider
convenience or exclusivity. partner, with the Swedish operator launching it on its TiVo based
Cost-effectively bundling channels and services that are available platform the same year.
elsewhere, with something like a broadband package, is an example Since then the subscription video-on-demand service has
of value through convenience. Exclusivity, on the other hand, is expanded to pay TV platforms all around the world. The first US
important but does not necessarily need to be achieved through cable operators to take up the service were RCN Telecom Services,
direct content production. This can also be offered through licensing Atlantic Broadband and Grande Communications in 2014, followed
deals – such as Sky’s deal to offer HBO content in the UK through closely by Suddenlink. While the biggest US cable providers took
Sky Atlantic. longer to take to the idea, Comcast launched Netflix to X1 customers
Of the many larger operator-broadcasters that do effectively invest in 2016, while Charter and then Cox integrated the service in 2017.
in original content, Border says the choice comes down to whether In Europe, Liberty Global’s decision to embrace the service
they should produce or commission new genres – for instance in 2016 was a major watershed moment. As part of a multi-year
comedy – and how to brand this original content. deal, the operator pledged to make Netflix’s content available to its
“In some ways, for these large broadcasters, the rise of Netflix subscribers in 30 countries around the world.
can be slightly beneficial – as they can commission local content, In the past year alone, Netflix has extended its partnership
for which they own the rights in their own markets, and then sell agreement with Deutsche Telekom, struck an expanded
the rights for other global markets to an international platform,” international deal with Orange, and made a multi-year agreement
says Border. with Altice covering France, Portugal, Israel and the Dominican
“Such deals – in which global SVOD platforms obtain near-global Republic. A pact with OSN in February 2018 marked Netflix’s first
exclusive rights to a piece of content and market it as an ‘original’ – partnership in the Middle East and North Africa region.
are becoming increasingly common.” “In the post-OTT era we now see the blending of the key SVOD
“For smaller cable and pay TV operators, providing more niche apps by pay TV cable operators,” says Anthony Smith-Chaigneau,
or localised service and content, originals become less important. senior director of product marketing at Nagra – the digital TV
These services are often picked up by consumers alongside an division of the Kudelski Group. “Some would say this is letting the
SVOD platform or subscribed to for their local or specialised fox into the hen-house but we see that, with the cable operators
content. It is therefore more important that these platforms provide delivering good broadband, content bundling (premium to skinny),
carefully curated in-demand content, rather than major originals.” 4K services and access to SVOD and other apps, this is a strategic
For general operators looking at TV seasons, Border claims it move to retain customers.”
comes down to optimising choice based on local tastes. For example, Ed Border, principal analyst at Ampere Analysis, says that
Turkish viewers have a preference for long-form TV seasons with operator decisions to embrace Netflix are dependent on the state of
long episode times, South Korea has a steady flow of one-off, short the market, the operator’s market share, as well as the relationship
drama seasons, while in South America long-running telenovelas between the platform and the operator.
are key. “Effectively, two things need to happen in order for an operator
to onboard an SVOD platform: the operator needs to be profiting
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