Blog — 26 Mar, 2024
Eastern Europe multichannel markets begin to shrink
By Piotr Gaber
Highlights
Multichannel subscriber bases are declining in six Eastern European markets, signaling market saturation and a shift in focus for operators.
Despite slowing overall customer base growth, revenue dynamics remain stable due to operators increasing ARPU.
IPTV is projected to experience the largest increase in subscribers by 2028, driven by expansion of fiber networks and advanced functionality.
The multichannel subscriber base is witnessing a decline across six Eastern European markets, marking a trend of market saturation in the region. Despite this, revenue dynamics remain stable as operators focus on increasing ARPU and enhancing services. Major players in the region are shifting their strategies from organic growth to improving offerings and increasing ARPU to drive future revenue. This transition is expected to boost total revenues, with multichannel revenues projected to outpace subscriber growth.
IPTV is anticipated to experience significant growth, fueled by the expansion of fiber networks, while cable subscriptions are expected to decline. Despite the overall growth, Russian operators exhibit the lowest monthly ARPU in the region, although they contribute substantially to the region's pay TV revenues alongside Poland. The importance of Russia in the Eastern European pay TV market is highlighted by its significant subscriber base and the role of IPTV services in driving growth.
The region has been exhibiting signs of market saturation for a couple of years, and in 2022, Latvia, Lithuania, Estonia, Bulgaria, Slovakia and Hungary experienced a decrease in their multichannel subscribers. As some of the region's major operators are not gaining subscribers, they are redirecting their focus from relying solely on organic growth to improving services and increasing ARPU to generate future revenue. This shift is expected to drive up total revenues, as premium programming and advanced services become more accessible to subscribers. Many of the leading pay TV operators in the region are enhancing their over-the-top and TV Everywhere services, as well as offering bundled packages, to retain customers. Consequently, multichannel revenues are projected to grow at a faster rate than the subscriber base.