TBI Tech & Analysis: Behind the numbers of Eastern Europe’s pay-TV staying power

Pay-TV’s resilience in Eastern Europe means it continues to hold the advantage over online video despite declines in both subscriptions and revenue, reveal Omdia analysts Matthew Evenson, Irina Kornilova & Tony Gunnarsson.

These declines in pay-TV, combined with growth in online video subscriptions and revenue, means that the gap is continuing to narrow.

The 11.4% YoY increase in online video subscriptions in 2022 is much lower than the respective number for previous years (23.7% in 2021 and 47.6% in 2020), but 2022 did see the total number of online video subscriptions reach just shy of 34 million.

The growth in pay-TV subscriptions has also declined to the point that total pay-TV subscriptions dropped 0.14% from 83.5 million to 83.4 million.

For the full year 2022, pay-TV revenue in Eastern Europe totaled $6.97bn, down 6% on 2021’s total of $7.42bn. In contrast, total online video
revenue for the region grew 8.4% from $2.02bn to $2.19bn.

However, the most significant driver of this change in revenue was the weakening of local currency exchange rates against the US dollar.

Although online video continues to catch-up with pay-TV, the latter still accounted for 76.1% of total video market revenue in 2022, down from as high as 88.4% in 2018.

Platform performance

For the first time, online video is the largest individual viewing platform in terms of the number of subscriptions. In 2022, there were almost 34 million online video subscriptions, compared to just over 33.2 million cable subscriptions.

The 2022 launches of new online video services, such as Disney+ and SkyShowtime, in markets across the region pushed online video subscriptions to new highs in 2022 and beyond.

Both cable and satellite subscriptions declined YoY by 1.7% and 1.3%, respectively, and will continue to fall throughout the forecast period.

Subscriptions to pay DTT platforms will remain largely flat at around 1 million through the end of the forecast period.

IPTV remains the fastest-growing pay-TV platform, with subscriptions increasing by 4.4% in 2022 to just under 20 million. Growth in IPTV will decline in the coming years as markets hit saturation, meaning that total IPTV subscriptions will reach just over 22 million by 2028.

The excerpt above is from Omdia’s Pay TV & Online Video Forecast Report: Eastern Europe – 2023, written by Matthew Evenson, Research Analyst, TV & Online Video, Irina Kornilova, Practice Leader, TV & Online Video & Tony Gunnarsson, Principal Analyst, TV, Video and Advertising. To read more, click here (subscription required). Omdia and TBI are both part of Informa Tech.