Market Insight

Oflaz launches low-cost channel package in Turkey

October 16, 2014  | Subscribers Only

Constantinos Papavassilopoulos Constantinos Papavassilopoulos Principal Research Analyst, Service Providers & Platforms

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Filbox TV is the name of a new low-cost pay satellite service launched in Turkey this month. The service, operated by Oflaz Media Group, transmits from the Turksat 4A satellite, which is accessible with a 40cm satellite dish. Filbox does not require a set-top box - just the purchase of the operator’s CAM module. The module can then be used in existing DVB-S2 set-top boxes or TV sets with an integrated Common Interface (CI) slot.

Filbox offers in total 13 channels, 10 of them in HD quality. The offers includes six movie channels operated by Oflaz Media Group (SinemaTV, SinemaTV 2, SinemaTV Aile, SinemaTV 1001, SinemaTV Ask and SinemaTV Aksiyon - all in HD) plus the following channels: RTL, Sci Tech TV, English Club TV, Da Vinci Learning, Viasat History, Viasat Nature and Fight Box. The purchase of the CAM module costs 149 Turkish Lira (equivalent to $66). Once the subscriber activates the module, all Filbox channels are available for 12 months with no further charge. After the end of the first year, the annual renewal charge is 145 Turkish Lira.

Our Analysis

Filbox was (from 2009 till end of 2013) on the D-Smart satellite platform but was removed by Dogan Media (owner of the platform) in January this year, triggering a formal complaint to the regulator, RTUK, from Oflaz Media Group. Some of the Oflaz Media Group’s movie channels have been offered since 2013 by the Turksat pay cable platform Teledunya, the Turk Telekom IPTV service Tivibu and the Turkcell OTT & mobile TV platforms.The company has also launched a free-to-air movie channel, Fil TV, on the Turksat 4A satellite.

The Turkish pay TV market is highly competitive where film channels are concerned: the largest pay TV operator in the country, Digiturk, offers a package of 12 movie channels (seven of them in HD) at a cost of 27 Turkish Lira ($11.80) per month while the other satellite operator D-Smart offers its film package, consisting of 12 movie channels (all of them in HD) at a cost of 20 Turkish Lira ($8.80) per month. In that framework, the Filbox offer at a monthly cost of $5.50 (or $66 on an annual basis) seems to have a slight competitive advantage.

The pay TV market in Turkey is very dynamic, a factor that can positively affect the prospects of a new entrant like Filbox. According to IHS Television Media Intelligence, pay TV subscribers in Turkey have more than doubled in the last 10 years (2004-2013) from just over two million in 2004 to 5.5 million in 2013. That represents a Compound Annual Growth Rate (CAGR) of almost 10% (9.4%). IHS expects the growth in sub figures to reach 7.5 million at the end of 2018.

The Filbox service could also prove beneficial for the satellite capacity provider, Turksat. The reasons are that a service like Filbox can drive up revenues as HD capacity costs much higher than SD one. Another reason is that the proliferation of many low-cost HD operators, instead of very few big ones, offers the most integrated HD growth strategy for satellite capacity providers.

Geography
Turkey
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