The onslaught of pay-TV offerings such as Netflix, Amazon, and Disney+ have no doubt changed the dynamics of broadcasting around the world, but broadcast remains a key market for satellite. While the satellite pay-TV market is in a state of flux, it still offers significant revenue generating opportunities for satellite operators around the world.

In this feature, we talk to three traditional satellite pay-TV operators — Allente in Scandinavia, Tricolor in Russia, and Dish TV India — about how their needs are changing. These players discuss the evolution of satellite pay-TV in their respective territories, the very real impact of Over-the-Top (OTT), and how their respective markets are developing in terms of entertainment and broadcast services.

Allente

Allente is a new force on the pay-TV landscape in Scandinavia. The merger between Canal Digital and Viasat in spring of 2020 created a pay-TV powerhouse with around a million Direct-to-Home (DTH) subscribers and a growing Internet Protocol TV (IPTV) business. As Allente due for a major launch this year as a result of the merger, Bjørn Ivar Moen, previously CEO of Canal Digital and Telenor Broadcast, and the new CEO of Allente, has the challenging role of building the pay-TV business across Scandinavia. Moen says there will be no delays to the new launch and Allente is progressing a little faster than its original plans.

“What we see is that we need to adjust [our plans] in order to cope with the pandemic. If regulations are still around for swapping satellite dishes, we need to do cleaning, checks on the value chain. We need to plan for this when we start installing new dishes. That is how we are digging into things, rather than delaying it. We are really keen on getting out there with our new brand and new offering. Obviously, there is a pandemic going on, but we can’t wait to get out there. We are really looking forward to 2021,” Moen tells Via Satellite.

When it comes to satellite capacity, Allente will move from two satellites to one satellite with the Thor satellite from Telenor, which will cover its current and future needs. Moen says it is a massive logistical and technical undertaking to put all of its capacity on one satellite. “We also need to respect the customer and the value chain because we are living during the COVID era. We need to put safety measures in place. It is a massive undertaking and it will go on for quite a while. It will start in 2021 and go into 2022. Canal Digital will continue to be on the Thor satellite and the combined company will use more capacity on the Thor satellite than Canal Digital did by itself,” he adds.

In regards to the decline of DTH broadcasting, Moen says Allente is taking care of the DTH business as best it can and maintaining the value proposition for its customers, with improved DTH offerings like 4K. However, it is also looking to bundle new types of services that its customers are looking for, such as Subscription Video On Demand (SVOD) services, OTT, and even new services that add value and reflect changing customer behavior. The company also has a broadband TV operation in Sweden that is growing. It is taking market share, which is an encouraging sign, and maybe an indicator of its future direction. Moen says Allente is looking for ways to capitalize on this developing broadband business. Allente has 1.2 million combined customers: 1 million are DTH, the rest broadband, he says.

Moen admits the market is gravitating towards more SVOD services and OTT services. While he thinks linear TV will stick around for quite some time, for Allente it will be about renewing its offerings and staying innovative. Moen jokes that SVOD services seem to launching by the hour, but he says that Allente needs to make sure it offers what customers are looking for.

“We are seeing increased viewing on our platform year-over-year, this is obviously being driven by the pandemic. People are staying more at home. But, I still think it is interesting that we are seeing more increased viewing,” he says. “When the pandemic struck, the first thing that went away was sports. News viewing increased dramatically. The customer grew tired of news, customers then flocked to entertainment and movies, and then sports came back. I think that indicates that linear viewing and what we are doing is still relevant. It is up to us to make sure we can provide that great content in a way that the customers like, to complement the changes we were seeing from big international players.”

The company, like many, will look to mix broadband and satellite a lot more going forward. It is an interesting challenge for the company. Moen thinks it will likely stay on the level it has in place with Telenor. He says there are areas that Allente can benefit from having good capacity available like sports, and 4K sports events particularly when distributed via satellite. Allente is looking into more 4K sporting events, which have gotten positive reception from customers.

Moen believes DTH will be relevant for a long time: “We will certainly continue to make that offer as best we can in order to maintain the customer base as long as possible,” he says.

Tricolor

Russia is a massive pay-TV market with a population of just under 150 million people in a geographically dispersed area. Tricolor is a major force on the pay-TV landscape in Russia with around 12.2 million customers, including 10 million HD subscribers. Interestingly, it has around 210,000 4K subscribers, a growing sub-segment of the market. Tricolor’s IPTV numbers are around 1.2 million subscribers.

But there has been subscriber base stagnation in the Russian pay-TV market, says Nikolay Orlov, deputy director general for Content Policy of Tricolor. Overall, Orlov says Tricolor is seeing good prospects in the development of OTT/Video On Demand (VOD) services, and there is still a geography-driven play for satellite TV in Russia.

“We believe that the future of satellite TV lies primarily within the regions where broadband internet penetration is very low. There will be many such regions in Russia for a rather long time. In the regions where the internet is more accessible, we offer a hybrid set-top box connected to both satellite TV and the internet at the same time. Moreover, there are specific Russian dynamics of media service consumption. In the rural parts of Russia, customers watch satellite pay-TV, but in Russian cities, they use our OTT/VOD services much more.”

Orlov says Russia is following similar broadcasting trends to other parts of the world, but Netflix and Amazon Prime are not the big players — several large Russian streaming services play a much bigger role in the country. “In general, we see the same trends in Russia as in the rest of the world. Streaming and other OTT services will gradually replace traditional television broadcasting,” he says.

Tricolor, like a number of traditional pay-TV operators has had to adjust to survive in this new world. It has evolved from a standalone satellite pay-TV operator into a multi-platform operator developing its own ecosystem. The beginning of this evolution began around three to four years ago, and Orlov says it has now reached the end of the first phase of this evolution. Tricolor now has a number of OTT/VOD services such as satellite broadband and smart home services.

Tricolor sees good revenue growth prospects selling access to 4K channels to satellite TV users and additional sale of OTT/VOD services. Orlov says Tricolor intends to enter the horizontal market with its own OTT/VOD services next year. “We are optimistic about the future of our company in general and in 2021 in particular. We intend to remain a leader in the field of satellite TV and become one of the leaders in the field of OTT/VOD services,” he says.

Dish TV India

India is traditionally one of the most exciting markets for satellite pay-TV services. A population of well over a billion people and a growing demand for entertainment services led to an explosion in growth for pay-TV services over the last decade, and satellite has been front and center. Dish TV India (Dish TV) has long been a market leader and trail blazer in this market. It has around 23 million DTH subscribers, and now has around 13 million OTT subscribers for its brand Watcho.

Dish TV India Executive Director and Group CEO Anil Dua tells Via Satellite that the demands for satellite bandwidth are still strong and Dish TV expects the demand for bandwidth to grow by 50 percent over the next five years. At the same time, there is also the need to provide systems with full disaster back up of space resources, which does not exist today. “This also means that nearly 50 percent more capacity needs to be held as backup capacity, perhaps on a satellite with a lower cost,” he says.

Dua believes a second paradigm is emerging in India, and he expects to see Indian space policy open up over the coming decade, which could lead to DTH/Direct Broadcast (DBS) systems that serve the entire region. He says the sector should see capacity requirements grow by at least 200 percent over the decade.

DTH has been a strong success story in India. Dish TV launched services in India in 2003, and over its first decade, it saw a huge adoption of DTH as households moved away from analog TV services. DTH played a huge in role in digitizing the TV market in India. Over the course of the second decade, Dua says there has been a huge adoption of HD services, fueling the demands for even more bandwidth.

“We are still seeing large sections getting into TV viewing and the pay-TV ecosystem and at the same time, we are witnessing hybrid viewing [linear and online content] taking precedence,” Dua says. “While the OTT market continues to grow, it will supplement satellite pay-TV in India. TV will remain a primary source of family entertainment for the masses, whereas OTT is growing very fast on the back of mobile and the individual viewing experience.”

The dynamics surrounding OTT and satellite are particularly interesting in India. Dua says in India, there is still a strong entry-level market for pay-TV, as many households are still getting into TV ownership and experiencing linear TV. There has been a boom in OTT consumption due to the pandemic, Dua says.

“While OTT platforms were making a mark for themselves in the Indian market, the COVID crisis accelerated the process. However, there is scope for both to grow and cater to unique content requirements. India is yet to reach 100 percent TV penetration and OTT viewership is mainly driven by metropolitan and semi-urban areas,” Dua says. “Traditional TV is here to stay.”

The demand for pay-TV increased in these COVID times as people have been forced to spend longer time at home due to enforced lockdowns to combat the spread of COVID. Dua says news, movie, and general entertainment channels saw all-time viewing figures in recent months. Dish TV India witnessed a surge in demand for services as a result of these changing circumstances.

Dish TV has capitalized on that growth with its own OTT brand, Watcho. In January 2020, it had just over a million subscribers, but has now grown to more than 13 million subscribers. “We hope to further double this number very soon. Our plan to make Watcho a platform offering multi-lingual content should help boost these numbers still further,” says Dua.

Dua foresees significant growth opportunities in the future with digital acceleration picking up over the next few months and years. He says TV penetration and within that pay-TV penetration in India is still growing, which is great news for operators like Dish TV. “We have witnessed an increase in our subscriber base not just for our mainline DTH brands Dish TV and D2H, but also for our OTT brand Watcho. We believe consumers today no longer want to use TV, mobile, laptops for just entertainment channels but there is a growing demand for infotainment services also.” VS