10 Jan 2016

Figure 1

January 10, 2016 – The number of Internet protocol television (IPTV) homes in Central and Eastern Europe (CEE) will double by 2020, with pay TV subscribers in the region expected to total approximately 83.8 million. According to the Central and Eastern Europe Pay TV 2015–2020 Forecast published by global IT market research firm International Data Corporation (IDC), pay TV service penetration will reach 82% by the end of 2020.

IDC estimates that pay TV penetration in CEE households stood at 70% at the end of 2014, which represents growth of around 3% compared with the previous year. Pay TV operators in the CEE region have adopted a variety of strategies in line with the particular circumstances of the individual markets in which they operate, based on wide income disparities and demographic profiles within and between different countries.

"The CEE pay TV market will continue to grow, driven by innovative services and improved customer experience, although at a more moderate rate than in previous years," says Dušanka Radoničić, senior research analyst at IDC CEMA. "Data about the way consumers interact with and view content will become even more important, not only in terms of advertising, but also for making programming decisions based on the profile of the target audience."

Viewers are switching their habits from linear TV viewing to using on-demand services. Quality of reception, customer care, and exclusive content will drive differentiation for pay TV services.

The proliferation of digital free-to-air television and low-cost OTT content is among the challenges that pay TV is likely to face.

Across the CEE region, connectivity is becoming more important in bundling as a whole. Consequently, broadband is fast becoming a commodity, and the TV offer is the key differentiator, with telecom companies experiencing significant revenue growth in their TV offer portfolio segment. Operators are increasingly looking to deliver non-linear and multiscreen services, as well as providing TV as part of a triple-play or quad-play bundle. Considering the fact that many markets in CEE are still very fragmented, especially in terms of cable pay TV distribution, further consolidation among operators is expected.