Europe

Tiscali UK Ramps Up IPTV, Securing Sky, Disney and Universal Content

U.K. IPTV operator Tiscali has secured distribution rights to the full suite of Sky basic channels. The deal marks a key step in the ISP�s plan to invigorate IPTV adoption in a market dominated by cable, satellite and DTT.

]]> The deal includes access to Sky One, Sky Two, Sky Three, Sky Arts, Sky Travel, Sky News and Sky Sports News. Many of these same channels were recently pulled from cable operator Virgin Media due to breakdowns in licensing negotiations with Sky. The channels� lack of availability on cable makes their IPTV entrance all the more important for Tiscali.

Earlier this June, Tiscali secured IPTV rights to Disney Channel, Playhouse Disney and Disney Cinemagic. In addition, the company has signed with Universal Pictures to offer PictureBox, a feature film SVOD product priced at �5/month.

Tiscali entered U.K. IPTV via its August 2006 acquisition of Video Networks, which had pioneered IPTV in the market under the Homechoice brand. At the time of acquisition Video Networks had built a Homechoice subscriber base of 45K households.

The company has a low-entry-price strategy in place, with a �14.99/month triple-play package based on a 2Mbps broadband connection.

Telef�nica and Sogecable Strike Triple-play Alliance

Spanish firms Telef�nica and Sogecable June 27 announced an agreement to collaborate on a triple-play offering, branded Trio+, based on Telef�nica voice and data services and Sogecable�s Digital+ DTH platform.

]]> The deal marks a near-term softening of competitive lines in the market as Sogecable DTH subscribers gain access to Telef�nica�s IPTV packages while Telef�nica�s Imagenio IPTV households will receive DTH product offers.

In addition to exchanging reach into each other's customer bases, the deal will grant the firms increased leverage in content license negotiations. The agreement indicates Sogecable will lead joint content buying initiatives and thereby become a content supplier to Telef�nica.

The agreement is non-exclusive and expires after four years. Kagan analysis indicates the agreement is aimed at jumpstarting Sogecable�s hybrid DTH/IP service while boosting consumer interest in Telef�nica�s Imagenio platform. Both DTH and IPTV platforms in Spain face immediate threats from digital cable and future competition from emerging pay-DTT systems.

TV Vlaanderen Launches 16 New Channels

Belgian DTH start-up TV Vlaanderen has added a premium-tier package with 16 new channels available for �13.90.

]]> The new channels are: Nickelodeon, MTV, Sailing Channel, France 4, France 5, VH1, VH1 Classic, Boomerang, Jetix, DorcelTV, MTV 2, MTV Hits, MTV Music, MTV Base, Zone Club and Zone Reality.

TV Vlaanderen initiated service in Q1 2006 with a mixed Flemish and international content slate and an optional DVR-enabled STB. The move is bold considering the market is one of the most heavily penetrated by cable globally.

In Q1 2007 Providence Equity acquired a majority stake in the firm, with original 100% shareholder Airbridge Investments holding the remainder.

TV Vlaanderen announced at end-January 2007 it had reached the 30K subscriber mark, confirming Kagan�s estimates of a 28K year-end 2006 subscriber base.

Unity Media to Live Up to its Name

Unity Media announced May 21 it will merge operations for its three largest cable assets, iesy, ish and TeleColumbus West, creating a network that will reach over five mil. households. The regions reached by the service will cover the states of Hesse and Nordrhie Westfalia�Frankfurt and Dortmund are their largest metro areas, respectively. Click here for complete coverage of the multichannel market in Germany.

]]> Kagan expects the German market will continue large consolidations as MSOs look to streamline one of the most complete cable structures in Europe. The announcement came just a week after consolidation rumors were confirmed May 18 by Primacom, which serves 1.3 mil. HHs, regarding the possible interest acquisition by Kabel Deutschland, the country�s largest MSO.

France�s Free IPTV switched to MPEG-4

France-based Iliad Telecom has announced it will now use MPEG-4 to encode channels for its IPTV service, Free. The upgrade will allow Free to further compress video to allow delivery of Iliad�s full channel suite to all broadband subscribers on its network where previously it required speeds of at least 3.5MB/s. Click here for complete coverage of the multichannel market in France.

]]> The move to MPEG-4 will also provide extra bandwidth for advanced services such as HDTV. France has been one of the leading proponents of HDTV, already launching on DTH provider Canalsat and France Telecom�s Malign TV. Kagan believes the real boost to HDTV in the country will come from DTT, which is already slated to carry HD signals and is heavily supported by both the government regulator Conseil Superieur d'Audiovisuel (CSA) as well as local and national broadcasters.

Belgacom Hits 150K IPTV Subs at Q1 07

Belgian telco and IPTV operator Belgacom May 16 announced its Belgacom TV subscriber base was just a few households shy of the 150K mark. It added 9.8K net additions during the quarter, in line with the 9.6K added in Q1 2006.

]]> Launched in 2005, the Belgacom TV service attracted 33K subscribers by year-end 2005, and executives set a 100K subscriber target for YE 2006. Between April 2006 and January 2007 the company offered a "Try & Buy" promotion to allow potential consumers to experience the service will little upfront investment. Following the promotion�s termination, Q1 2007 net additions slid on both higher churn and lower gross adds.

Belgacom announced Q1 2007 IPTV ARPU of �13.40. It expects approximately 100K net additions in 2007 and an IPTV ARPU in the �15 range.

Austrian Digital Cable Gets a Boost

Austrian cable operators Kabelsignal (Niederősterreich) and Liwest (Operősterreich) have ordered a combined 30K digital STBs with plans to deploy HD in the near term. The MSOs are two of 25 smaller companies that ordered the STBs via a special digitization program which offers a �40 ($54) subsidy to subscribers. Click here for complete coverage of the multichannel market in Austria.

]]> Many of the remaining analog MSOs are likely to follow Kabelsignal�s and Liwest�s upgrade to take advantage of more than 66K STBs made available through the subsidy. The move should help the smaller MSOs jump-start digital conversions in Austria, allowing the companies to develop DTV systems with minimal investment.

Switzerland To Launch Broadcast HD Channel

Public broadcaster SRG CSSR announced this [??] month it will launch an FTA HD channel by the end of 2007 dubbed HD Suisse. Channel content will include high- definition programs from four Swiss broadcasters�SF, TSI, TSR and TvR�and will be broadcast in French, German, Italian and English. Click here for complete coverage of the multichannel market in Switzerland.

]]> SRG CSSR noted that live sports programming will receive priority for broadcast but will also include genres such as documentaries, television series and children�s programming. Kagan expects the sports programming will be a significant draw for viewers and should be a major driver for both DTT and HDTV uptake in the near to medium term.

NTV Launches HDTV In Russia

Russian DTH provider NTV Plus launched its HDTV service April 27, offering its 550K subscribers three high-def channels. HD Kino, HD Sport and HD Life will be offered on its premium platform, requiring an HD STB upgrade for reception. Click here for complete coverage of the multichannel markets in Russia.

]]> NTV Plus will utilize four transponders on the Eutelsat Communication W4 satellite and expects to attract between 10K to 20K HDTV subscribers by YE 2007. Kagan believes that like many operators, NTV will leverage the 2008 Beijing Olympics to drive user uptake of advanced services, including HDTV. NTV disclosed it has invested $3.5 mil. for the HDTV launch.

BBC Trust Greenlights Freesat U.K.

The BBC Trust issued its formal approval for the launch of a free-to-air (FTA) satellite service that will broadcast FTA Freeview channels to U.K. households. The approval officially urged BBC management to launch the service as quickly as possible. The service will be a valuable alternative to homes outside the Freeview broadcast reach, currently at about 75% of the country, leaving a quarter of HHs without FTA DTV services. Click here for complete coverage of the multichannel market in the U.K.

]]> While the launch of Freesat may accelerate FTA DTH uptake, Kagan anticipates U.K. DTT figures will continue to gain the majority of the FTA traction as new transponders are installed in smaller cities over the next five years. However, the move may make HDTV more accessible for FTA channel viewers as the spectrum allocations needed for high-def DTT have been slated for the highly contested auction block following the 2012 analog shutoff.

The BBC Trust is an organization that works in the public interest overseeing the operations and strategic direction of the BBC. The trust is independent of BBC management and acts in the interest of the FTA license-fee payers.

UPC Czech to Launch Digital Cable Service

According to Broadband TV News, UPC Czech Republic is slated to launch a digital cable service as early as May. The development follows Liberty Global�s acquisition of the controlling share of number-two cable MSO Karneval, which already operates a digital cable service. Click here for compete coverage of the multichannel market in the Czech Republic.

]]> UPC is awaiting approval from the Radio and TV Council (RRTV) for distribution of digital channels, many of which are already offered by Karneval on its struggling digital platform. Broadband TV News reported UPC estimates it will have 80K-90K subscribers by YE �07, but with a limited digital channel offering and high initial STB costs for subscribers, Kagan anticipates a more moderate uptake.

Freeview Takes DTV Title from BSkyB

Freeview announced April 18 that it now serves as the primary screen for 8.2 mil. HHs in the U.K. with sales of 1.7 mil. FTA set-top boxes through Q1 �07. With that figure, Freeview passed BSkyB as the most-watched DTV platform in the U.K. However, BSkyB is pushing back with an impending near-term launch of a subscription DTT service that will pull key Sky channels Sky News and Sky Three off the FTA platform and onto its four-channel pay DTT service. Click here for complete coverage of the multichannel market in the U.K.

]]> BSkyB continued strong growth through 2006, adding nearly 400K subscribers to its platform even though Freeview was thriving and Virgin, its primary cable competitor, had no significant sub additions. One of the key market factors playing into Sky�s dominant position is its grip on exclusive HDTV channels, which has left Virgin and Freeview without much to offer viewers thirsty for high-definition television. Freeview, however, looks to sweeten its offer with a DVR called Freeview Playback, which platform manager Cary Wakefield hopes will penetrate 10 mil. DTT HHs by 2012.

Sogecable Improves Performance

Spain�s dominant pay TV provider Sogecable increased its net profit to �1.2 mil. ($1.6 mil.) in Q1 �07 compared to �20.1 mil. in losses in Q1 �06. Improved performance has bolstered quarterly reach and revenues as well by attracted 21K net subs for the period, raising video ARPU to �40. From Q1 �06 to Q1 �07, Sogecable grew by 80K subscribers to 2.06 mil. digital satellite HHs. The growth was due in part to a consistent reduction in churn, which dropped from 12% to 10.9% during the period. Click here for complete coverage of the multichannel market in Spain.

]]> Video ARPU was complemented by pay-per-view services, which added �7.80/month through the quarter. Kagan believes Sogecable ARPU was also positively affected by subscribers taking more extensive programming plans. Subs to the basic tier dropped from 9% to 5% as the Canal + tiers rose from 39% to 45% YoY through Q1 �07. Although the upper Digital + tier take rate dropped from 52% to 50% during the period, Kagan anticipates the top penetration will improve over time as more sports and entertainment programming is offered in high definition on the upper tiers.

Telef�nica O2 Czech Republic Reports 16K IPTV Subs

Telef�nica O2 Czech Republic reported in April its system has bolstered its IPTV subscriber base to 15.6K households through December 2006. The system launched in September 2006 and will use Telef�nica�s tried-and-tested Imagenio IPTV technology which has already been successfully deployed in Spain. Click here for complete coverage of the multichannel market in the Czech Republic.

]]> Following 2005-2006 consolidation efforts, Telef�nica O2 is made up of the former national telco, Cesky Telecom, mobile leader Eurotel Praha and other telecommunication companies�all incorporated under the O2 brand as of September 2006. O2, 69.4% controlled by Telef�nica, is aiming to have nationwide IPTV coverage by 2007, with near-term rollouts proceeding on a regional basis. The system will run head-on into cable incumbent UPC, which recently consolidated with number-two MSO Karneval in August 2006 and also operates the country�s largest DTH system.

Fastweb Approves Swisscom Buyout

Italian ISP and IPTV operator Fastweb agreed March 26 to the E3.7 bil. acquisition offer extended by Swisscom earlier this month. Via the deal Swisscom gains one of the world's most seasoned IP-Video operations teams in addition to a significant conduit for free cash flow growth. Click here for complete coverage of multichannel TV in Italy. Click here for complete coverage of the multichannel market in Italy.

]]> Swisscom recently entered the IPTV space, having launched its Bluewin video service Q4 2006 following a series of rollout delays. At YE 2006 10K households had installed the 120-video-channel product while another 10K subscribers awaited installation. Swisscom is in the process of deploying VDSL infrastructure across Switzerland capable of delivering up to 30Mbps. With such fast download speeds a myriad of multimedia applications are feasible including IP-HDTV. Swisscom will undoubtedly look to Fastweb's IP-video operations executives for guidance on future service rollouts. Swisscom was also in need of a shot in the arm with EBITDA down 9% YoY as revenues stagnated and CAPEX increased 22%. Meanwhile Fastweb grew revenues from E968 mil. to E1.26 bil. YoY while boosting its EBITDA margin from 32% to 34%.