Streaming Media
Central and Eastern Europe has so far not been the focus of US-based streamers, but with rollout in Latin America and Western Europe complete the focus has turned to countries including Poland, Czech Republic (Czechia), Bulgaria, Romania, Slovenia, Hungary (with Turkey and Russia). Netflix is dominant with Amazon Prime also well-established but the introduction of Disney+ and SkyShowtime have the potential to unsettle and perhaps even dethrone the market leaders.
article here
In 2020-21 streaming services across the world experienced a
boost resulting from stay-at-home measures relating to the pandemic and Central
and Eastern Europe (CEE) was no exception. The overall number of online video
subscriptions in the region reached 31 million in 2021, up from 25 million in 2020,
calculates Omdia.
As more OTT services begin to look to the region as an
expansion point CEE’s SVoD subscriber base is forecast to grow over 60% from
2020 to 2022, primarily driven by Netflix, and the launch of HBO Max and
Disney+, in figures supplied by Ampere Analysis. This strong growth is forecast
to continue into the future supported by the launch of new services including
SkyShowtime and the steady improvement of broadband availability.
For most countries in the region the subscription OTT
landscape was, until recently, essentially limited to Netflix and Amazon Prime
Video. The lack of alternative OTT options has limited churn but that is set to
rise. The average CEE SVOD user subscribes to 1.6 services but with the launch
of more US competitors, rotational churn – (subscribing to different services
at different points of the year) could occur for budget-conscious viewers, says
Callum Sillars, senior analyst, Ampere. “As the market becomes inundated with a
deluge of competing SVoD services, cheaper ad-supported tiers could prove the
difference and key to growth in a relatively price sensitive market.”
The major international streamers in CEE
Though far from reaching saturation, Netflix faces
increasing competition as international, local, and regional players begin to
catch up. In Q1 2022 Netflix ceased operations in Russia causing the loss of
700k subscribers, but outside of this Ampere expects continued growth. The
majority of Netflix regional subscribers are in Poland – some 2 million
according to Omdia. Its local original content production has been limited to
Poland too.
“Netflix have been making a big push in Poland,” says
Sillars. “In 2016 it was the first CEE market in which Netflix localized its
services. It has over 40 Polish titles in production, and Poland has received
over $100m in original content investment to date. A new Warsaw office will
soon act as a hub for the region – a sign of investment to come, with Poland
set to be at the heart of Netflix’s CEE plans.”
As elsewhere, Apple TV+ remains highly dependent on Apple
device owners, with the service garnering limited interest outside the
footprint of this core user base. “In CEE Apple device penetration remains much
lower than Western Europe due to expensive devices presenting a barrier to
entry, curbing Apple TV+ success in the region,” says Sillars.
Matthew Evenson, Research Analyst for TV and Online
Video at Omdia adds that the region seems to be less of a priority
for both Amazon and Apple at the moment, although Amazon launched a localized
version of its e-commerce store in Poland (amazon.pl) last year, so it can now
offer more of the Prime benefits which will increase the number of Prime
subscribers and could, in turn, lead more subscribers to watch Prime Video
content.”
Both HBO Max and Disney+ recently launched in CEE, in
Q1 and Q2 2022 respectively. HBO Max benefits from the transition of its
existing pay TV operations and quasi SVOD service HBO Go to the pure SVOD
platform that is HBO Max, “and therefore can expect a strong user base from
launch” suggests Sillars.
“Disney+ offers a new proposition for many CEE markets and
provides significant potential for market disruption. Disney+ will see its
launch subscriber base buoyed by bundling deals in Poland which makes the
service available to millions of users, and strong growth will be expected
outside of these bundles well into the forecast period.”
Paramount are yet to launch its rebranded Paramount+
streaming service but Paramount hubs exists within local pay TV and OTT platforms.
These are present in multiple CEE markets including Hungary, Poland, Russia,
and the Baltics.
“Despite this Paramount+ will not be launching their
standalone SVOD platform in CEE but instead will launch as part of SkyShowtime
across the majority of CEE markets in the second half of 2022.”
Local SVOD players
A number of major CEE markets are home to a dynamic and
unique SVOD marketplace where local players have been able to thrive.
The biggest SVOD catering solely to a home market is
Russia’s KinoPoisk HD, part of Yandex’s all-in-one subscription—Yandex Plus
(Yandex.com). Similar to Amazon Prime, Yandex Plus offers subscribers access to
music streaming, ad-free on-demand video, free delivery on online purchases,
and more. It is the largest SVOD in CEE,
with over 10m active subscribers, per Ampere.
Several pan-national services are also present in the
region. Prominent among these are Voyo and Go3 which each cater to a small
number of countries solely within CEE (Go3 in the Baltics, and Voyo across
South-eastern Europe).
“The Baltic states are one of the few regions where Netflix
is not the market leader, here Go3 has pole position, with a market share
approaching 45%,” says Sillars. “A local content offering as well as
partnerships with both local pay TV providers and international OTT players has
enabled this pan-national player to achieve a dominant market status with a
subscriber base expected to reach over 400k by the end of 2022.”
Voyo is available across five CEE markets but has been most
successful in its two core markets of Czechia and Slovakia where it beats out
HBO Max and Amazon Prime Video to be the second most subscribed OTT service,
behind Netflix.
Backed by broadcaster Central European Media Enterprises
(www.cme.net), Voyo is forecast by Ampere to reach 900k subs in all markets by
the end of 2022, after beginning 2020 with just 150k of them.
Russia sits within its own niche with local services
providing local content through a variety of monetization models. Russian
protectionist policies have prevented international services from competing on
an even playing field allowing SVOD services unique to Russia to fill the
gap.
HBO had a streaming
service in some of the region prior to the launch of HBO Max, so it essentially
expanded that service to become HBO Max in a lot if its territories. As such,
it has a number of existing or upcoming local series (The Informant from
Hungary, The Winner from Czech Republic).
Less well known is
Viaplay, but Omdia report that it already has a lot of original productions for
its home Nordic territories. It launched in the Baltics in the first half of
2021 and then Poland in August 2021 and has a number of original Polish series
in the works. Viaplay also acquired major sports rights for these markets to
broaden the service’s appeal.
“Because there isn’t
that cost saving incentive to drive Eastern European consumers to online video
services, the quantity and quality of content offered by these services will be
relied upon more heavily to drive new subscriptions,” says Evenson.
Pay-TV and OTT mix holds key
CEE’s average SVOD penetration sits at just under one
quarter (22%) of households, limited primarily by broadband penetration,
payment methods, and limited local content. This leaves the region’s SVOD
market relatively undeveloped and with significant unexploited growth
potential. Key to whether this potential can be realised is whether consumers
consider SVOD services as supplementary to pay TV or as a suitable replacement.
“There is still room for growth but because of the more
complementary relationship between pay-TV and online video, the ceiling on the
online video market will likely be lower for the near-future,” says Evenson.
Evenson highlights two main differences impacting the online
video growth in Eastern Europe compared to Western Europe or the
US. Firstly, the penetration of both broadband connections and video
capable mobile connections (4G and 5G) is much lower in the region, which
limits consumer access to online video services. Secondly, the cost of pay-TV
packages is broadly much lower in the region.
“This means there isn’t a significant incentive for
consumers to switch from pay-TV to SVOD from a purely cost-saving perspective,
which is what kickstarted the growth of online video in the US.
Because pay-TV is holding its ground, partnerships
between telcos and online video services are deemed “very important” for any
streamer wanting to establish a foothold in the market. For pay-TV providers,
offer pay-TV customers the option to add an OTT sub to their overall TV package
means they can keep their customers happy and not lose them altogether, which
further helps pay-TV hold its ground.
Ampere notes that attitudes to SVOD will vary greatly due to
the vast range of pay TV pricing across the region, (from $23 per month in
Slovenia to just $2 per month in North Macedonia.
“International SVOD prices will need to match the needs of
each individual market,” says Sillars. “Services like Netflix will never drive
cord-cutting in a market where the pay TV monthly ARPU is $2 whilst charging
$7.99 for their cheapest tier. Though pay TV can be expected to have
significant inertia, high ARPU pay TV markets in CEE could begin to experience
a wave of cord cutting arriving with the debut of new US SVOD services
providing a contract-less alternative to pay TV.”
ends
No comments:
Post a Comment