BUSINESS

Pay TV sees rare drop in subscribers

VANGELIS MANDRAVELIS

TAGS: Business

Pay TV in Greece has suffered a setback. Having gradually become a mature market, and at a time when taxation makes up more than 40 percent of what the customer pays, a reduction in subscriber numbers has been recorded.

In the first half of the year, there was a 15,000 reduction in Pay TV subscribers.

It is the first time since OTE entered the market in 2010 that customer numbers have fallen. The momentum that the company built up managed to outweigh any reduction that Forthnet experienced on its subscription TV platform. However, after many quarter-on-quarter increases, OTE experienced its first decline in subscribers in the second quarter of this year.

Although the drop was small, OTE management suggested that the maturing of the market as well as the high tax imposed as part of Greece’s bailout commitments in 2016 had taken their toll. Overall in the first six months of 2017, the reduction in customers came to 1.6 percent.

Signs that the market was on the way down started appearing in 2016, when the government insisted on introducing a 10 percent tax on Pay TV. VAT of 24 percent is also charged on this tax, taking the total levies on the product to more than 40 percent. This led to consumer behaviour being affected from the start of 2016, even though the measure was not implemented until July. There were only 1,000 new subscribers compared to 81,000 in 2015.

There are roughly 950,000 Pay-TV customers in Greece when all the networks, including Vodafone and Cyta, are taken into account. This represents a market penetration of 24 percent of households, which is similar to the figures in other Mediterranean countries, such as Spain, Italy and Portugal. However, it is substantially lower than the European Union average, which is 37 percent, and much lower than the average in Northern Europe.

Piracy has also played a part in preventing more customers coming on board. It is estimated that there are between 80,000 and 100,000 piracy-enabling devices in Greek homes, allowing users to watch Pay-TV channels for free. This leads to an annual loss of revenue that totals around 20 million euros, which does not include the illegal downloading of movies on the Internet.

The Greek Parliament recently approved legislation that foresees the creation of a committee that will force out of business anyone found to be illegal transmitting content from subscription channels.

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