Market Insight

Greek pay TV operators launch new standalone OTT services to reach younger audiences

March 02, 2020  | Subscribers Only

Constantinos Papavassilopoulos Constantinos Papavassilopoulos Associate Director, Service Providers & Platforms

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Greece’s two largest pay TV operators, Cosmote TV and NOVA, will launch separate standalone subscription over-the-top (OTT) video services in 2020. The new OTT services extend the reach of the video services currently offered to pay TV subscribers for free by each of the operators.

 

Cosmote TV will launch an Android TV 4K box in 2020 which follows the launch of an app for smart-phones and tablets in December 2019. Cosmote TV’s box will be pre-installed with YouTube, Google Play Store and Google Play Movies services. The Cosmote TV app will be available to both Android and iOS mobile devices. The Greek telco has made agreements with Smart TV manufacturers Samsung and LG and is currently in talks with Xiaomi. The Cosmote TV app will offer the option of downloading for offline viewing. The app supports up to 5 user profiles per account. However, only 3 concurrent views (one via the Android box and the other 2 on other devices) are allowed for entertainment content like movies and TV series and only 2 concurrent views for premium sports content. The OTT service will offer daily and monthly pricing options and will also offer live TV channels. Cosmote OTT service will offer also the option of purchasing blockbuster movies (TVoD business model). 

 

NOVA’s standalone OTT service is called Novaflix and will be officially launch on April 2020. The Unique Selling Point (USP) of Novaflix is premium film & TV series content. NOVA has 1st window rights with the majority of US studios. Novaflix will offer all 4 NovaCinema HD channels, plus the channels of FOXPlay. The film and TV series content offered by Novaflix will be identical to the one offered by NOVA to its pay satellite subscribers. Novaflix permits registration of up to three (3) devices, two (2) devices for parallel viewing and its app supports Android and iOS. The service fee is €12.90 (US$14) per month for new users or €9.90 (US$10.80) if you are an existing NOVA pay TV subscriber. Deals with LG and Samsung are expected in April 2020.

 

Our Analysis

 

The launch of a standalone OTT subscription video service is a solid strategic initiative by Cosmote TV and NOVA who aim to reach a new audience which is younger and was not subscribing to any pay TV platform till now. The Greek operators want to tap a new revenue stream, outside of traditional pay TV and reduce the very high operating costs associated with running a satellite platform.

For both operators their main pay TV platform, satellite, is experiencing a declining trajectory in terms of subscribers and revenues. NOVA is in the most perilous situation as its satellite subscribers’ base has declined by one-third between 2014 and 2019. For Nova, switching to an online video distribution platform is, logically, a business survival decision. At a first stage, Nova would try to attract as many new subscribers as possible to Novaflix. At a second stage, Nova can offer to those of its satellite subscribers who want to control their pay TV bill the option to switch to a less-costly option, that of OTT.

 

Cosmote TV, although in a much healthier situation than NOVA, has already started feeling the chills of a saturated satellite market. This is more evident by examining the rate of growth of its subscribers’ base during the first four years of its operation (2011-2015) with the next 3-year period (2016-2019). The CAGR (2011-2015) was 150% while the CAGR(2016-2019) stood at just 2.2%. For Cosmote, the main threat for its satellite and IPTV business is not coming directly from Nova, but from the proliferation of the major US OTT services like Netflix, Amazon Prime Video, Apple TV+ and soon Disney+ and HBO Max.  

 

A standalone OTT subscription video service has greater appeal for viewers, particularly of a younger demographic, who do not subscribe to a pay TV service due to its relatively more expensive monthly fee. A standalone OTT service also strives to significantly reduce the cost of operating a satellite pay TV service which requires high investment in infrastructure and consumer equipment. Greece is a relatively small pay TV market where pay TV penetration, according to OMDIA data, was around 25% at the end of 2019. More importantly, the Greek market is price-sensitive, especially considering the dire financial crisis that the country has faced the last decade. For pay TV operators, the reduction of video distribution costs and retaining a pricing regime attractive to the subscribers is a bare business necessity.

 

Netflix leads the Greek online video market with a commanding 80% share of total standalone OTT subscription video subscribers or just over 200,000 subscribers by the end of 2019. OMDIA is estimating that the actual viewership of Netflix in Greece is much higher than the figure of paying subscribers indicates. Close to half a million people are watching Netflix content in the country, a figure almost triple that of paying subscribers. The main reason for this phenomenon is the wide sharing of account details.

 

Geography
Greece
Research by Market
Media & Advertising
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