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Research from Dataxis has revealed that despite unchallenged domination in terms of pay-TV revenues among peers, traditional pay-TV operators in Europe have been increasingly pushed either into diversifying their accesses or giving in to consolidation with their historic competitors.
Dataxis pay TV 14Oct2021
The study noted that the phenomena was being led principally by the Comcast group - which operates Sky and Now TV brands in the UK, Ireland, DACH markets and Italy - is moving its strategy away from satellite TV. The US based media group has launched standalone OTT pay-TV products in each of its operating markets, slowly migrating its historic subscriber base towards those more flexible plans. The study noted how focusing on premium offers, Sky is enriching its content libraries by aggregating leading streaming platforms in its packages and struck significant deals in Western Europe.

Discovery+ and Disney+ entered the UK market through distribution partnerships with Sky and that on the heels was the launch of Sky’s own smart TV product line, an important move that Dataxis says reflects one of the company's new direction away from traditional set-top boxes and digital broadcast.

Deutsche Telekom is rated by Dataxis as second only to Comcast, and the study showed that Germany's incumbent operator is generating a growing share of pay-TV revenues in Europe. More than half of the group's revenues are generated in its home country but Deutsche Telekom is also present under its T-Mobile and Telekom brands across Europe in Czech Republic, Hungary, Poland, Slovakia, the Netherlands, North Macedonia and as Magenta in Austria.

Dataxis predicts that Deutsche Telekom's pay-TV revenues will increase by more than 25% in the upcoming 5 years, which is 3.6 times faster than the total segment, thanks to its focus on IP based TV offers and its increasing presence in markets where pay-TV retain significant progression margins.

French telecom operators were also rated as hold a strong position on the European TV landscape. Premium satellite operator Canal+ generated €2.4 billion euros in direct pay-TV subscriptions across 12 European markets in 2020. Through the acquisition of M7's satellite TV operations in September 2019, the group expanded its reach outside of France and Poland to an additional 2.4 million TV subscribers across Belgium, the Netherlands, Austria, Germany, Czechia, Slovakia, Hungary and Romania.

Orange is also a strong pan-European competitor, present in eight markets: France, Belgium, Luxembourg, Spain, Poland, Romania, Slovakia and Moldova. Iliad, the parent company of French telco Free, is expanding outside its home market: after acquiring Polish mobile operator Play in 2020, the group has announced its intentions of buying cable operator UPC in Poland from Liberty Global. The transaction is awaiting regulatory approval and should be completed by mid- 2022.

Yet the Dataxis report also stressed that major players were opting out of the market. Liberty Global, which generated 8% of total European direct pay-TV revenues in 2018, will only cover a 2% market share this year. This follows the holding's sale of its cable operations under the UPC brand across Germany, Hungary, Romania and Czech Republic to Vodafone group at mid-2019. After having transferred its assets in cable networks, the group may be preparing a return in its former markets, starting with Germany where it announced teaming up with InfraVia Capital Partners to invest in building their own fibre networks.

In southern European, local groups have intensified their acquisition strategies, like MTS Srbija which acquired a multitude of small local cable operators into its brand Supernova, boosting its market share from 25% in 2018 to almost half of Serbian total pay-TV connections, taking over the leading position before Serbia Broadband. In Slovenia, small cable operators whose survival was challenged are selling their operations to leading telcos like Telemach, T2 and A1.