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Dominican Republic TV update November 2012 James McDonald, Analyst 2
Dominican Republic TV update, November Highlights 2.Pay-TV landscape 3. Next-generation TV 4.Viewing and programming 5.TV advertising 6.TV forecasts 7.Informa viewpoint © Informa UK Limited All rights reserved
Highlights In April 2012, cable MSO Aster - which serves 13 cities and some 40,000 subscribers – seemed to have been sold to the Punta-Macao Consortium for US$27 million; US$17 million below the original asking price. However, the sale was suspended in July 2012 pending an investigation. The pay-TV market will grow some 3 percentage points by 2016, largely due to growth in the DTH sector, while the fragmented cable sector shows signs of stagnation. Current pay-TV market leader Tricom expanded its HD bouquet to 50 channels (with two additional 3D channels) in February 2012; the most comprehensive of all the MSOs. Claros IPTV launched in 1Q09, with Informa putting the total number of homes taking the service at 5,000 by end The first DTT transmissions began in June 2011 using the US ATSC standard. ASO is scheduled for 2015, although reports suggest this date may have to be revised. Informa research found only 5% of signals to be digital at end The Informa viewpoint is that prospects are good for the pay-TV players bottom lines as well as for consumers, who will continue to benefit from the fruits of an advancing market. © Informa UK Limited All rights reserved
TV overview © Informa UK Limited All rights reserved Source: Informa Telecoms & Media The economy is closely tied with the US and a free trade agreement between the two became effective in Broadcast and pay-TV piracy is prevalent. However, copyright legislation has been amended under obligations of the free trade agreement and extensions to existing protection measures should see some improvements in the medium-term. Informa research found fewer than 10% of signals to be digital at end Dominican Republic, split of TV households by platform, Dominican Republic, split of TV households by platform, Year-end data (000s) Television households 1,6671,7101,7531,7981,8441,886 Analog terrestrial Cable TV ,0301,000 IPTV DTH DTT DTT 1%
Pay-TV landscape Pay-TV platforms and operators Operator market performance Key developments Multiplay services and bundling Key market dynamics Next generation TV © Informa UK Limited All rights reserved
Pay-TV platforms and operators © Informa UK Limited All rights reserved Source: Informa Telecoms & Media; WBIS Dominican Republic, subscriber growth by major operator, Dominican Republic, multichannel market share by major operator, 1H12 7 Regulator INDOTEL reported 36 telephony providers in 2008, up from 15 companies in 2004, and recorded 98 legitimate cable TV concession holders at end There were thought to be more than 100 by 4Q12. Leading MSOs include Aster, Wind and Tricoms Telecable. DTH services are available through DirecTVs Sky Republica Dominicana as well as from America Movils Claro TV unit. Claro also launched an IPTV platform in 1Q09.
Operators: Subscriber performance © Informa UK Limited All rights reserved Year-end data H12 Sky (DTH) -6,0018,00030,00038,00050,00060,000 Tricom (cable) -70,000 76,00071,14080,000 Unspecified Operator(s) (cable) 668,000754, ,000905,00954,000928,860811,000 Source: Informa Telecoms & Media; WBIS Dominican Republic, subscriber total by major operator, H12 8 Claro stated in September 2011 that subscribers to its DTH and IPTV services combined to make it the largest pay-TV operator (Informa believed there to be some 5,000 homes taking Claros IPTV service at end-2011). Tricom contested, stating it had over 700,000 subscribers across its sectors (CATV, telephony and broadband) at that time. Aster operates in 13 cities, and reportedly held some 40,000 cable subscribers at end 1Q12. Regulator INDOTEL reported 414,515 subscribers to either a cable, IPTV or DTH service at end-August 2012; a 12.5% rise year on year. There are instances, however, of chronic underreporting from some players, while many of the smaller cable operators are not included at all. Subscriptions to DTH services abroad - which can be received in the Dominican Republic - are also omitted from this figure.
Key developments – operators DateDevelopment July 2012TV Globo secures carriage of its programming on CanalSats DTH platform across the Caribbean. July 2012Wind Telecom adds MovieCitys 1,200-title VOD service as a premium option, or for free to those subscribing to the MovieCity package. July 2012The sale of MSO Aster to the Punta-Macao Consortium is suspended pending further investigation. June 2012The authorities launch an investigation into the sale of Aster - over why the asking price was not met. April 2012Asters assets are sold in full to the Punta-Macao Consortium for US$27 million; US$17 million below the original asking price. Other bidders included Compañía Dominicana de Teléfonos (bidding US$25 million) and Wind Telecom (US$21.5 million). February 2012Tricom adds 11 new HD channels, including MTV HD, VH1 HD, Comedy Central HD, Nick HD and MGM HD, taking its bouquet to 50 channels. © Informa UK Limited All rights reserved
Multiplay services and bundling 10www.informatandm.com ©All rights reserved ProviderFixed broadband Fixed telephony TVMobile broadband Mobile telephony Wi-FI hot spots TricomFTTx - up to 100Mbps VoIPCableNo ClaroFTTx - up to 100Mbps VoIPDTH IPTV Yes – 3GYesNo SkyNo DTHNo WindNoVoIPMMDSYes – 4GNo AsterCable - up to 2Mbps NoCableNo
Multiplay services and bundling: TV component ProviderTV service (technology) Channels (SD/HD) Other details (DVR, technology suppliers, pricing…etc) TricomCable Up to 159 SD, 50 HD and 2 3D channels Standard STBs provided by Motorola HD DVRS supplied by Pace -First DVR is US$7 p/m, while a second is US$8 p/m -HD DVR also priced at US$8 p/m -MovieCity/HBO VOD services available Basic digital package US$15 p/m Premium HD package US$40 p/m SkyDTH Up to 171 SD and 39 HD channels Basic 97 digital package costs US$7.83 Top-tier Universe package costs US$18.60 HD DVRs with 500GB capacity (100 HD and 400 SD hours recording) MovieCity/HBO VOD services available A la carte ( channels) packages start at US$5.73 p/m Sky Premier HD/SD PPV movie rentals © Informa UK Limited All rights reserved 11
Multiplay services and bundling: TV component ProviderTV service (technology) Channels (SD/HD) Other details (DVR, technology suppliers, pricing…etc) ClaroDTH Up to 64 SD channels Basic 46 channel plan priced at US$14 Basic Extra (64 channels) is US$17.60 MovieCity/HBO VOD services available ClaroIPTV 195 SD and 43 HD channels 181 channel Superior plan: US$ channel Advanced plan is US$37.90 Social TV apps including Facebook/Twitter and SMS service MovieCity/HBO VOD services available MLB add-on available Advanced HD option is an extra US$ channel Superior HD option: US$8.87 WindMMDS Up to 192 SD and 15 HD channels Basic Eco 117 channel pack: US$14 p/m Top-tier 192 channel pack is at US$38 p/m HBO/MovieCity available (US$9 each) MBL premium pack costs US$17.60 p/m HD-DVR priced at US$8.87 © Informa UK Limited All rights reserved 12
Multiplay services and bundling: TV component ProviderTV service (technology) Channels (SD/HD) Other details (DVR, technology suppliers, pricing…etc) AsterCable (analog) Up to 103 SD channels Light 63 channel pack is US$39.5 Basic 103 channel pack is US$ channel HBO pack costs US$7.22 p/m 8 channel MovieCity pack costs US$8.59 p/m Combination of the two is US$13 p/m AsterCable (digital) 152 SD channels Basic 52 channel pack priced at US$ channel pack priced at US$9.25 p/m Full 130 channel pack costs US$18 Extreme 152 channel pack with DVR priced at US$22.81p/m HBO/MovieCity services available MBL Extra Innings priced at US$17.61 p/m © Informa UK Limited All rights reserved 13
Key market/competitive dynamics Bundling is a key part of many players strategies. Claro is the only operator able to offer quad-play, with an entry-level bundle incorporating fixed telephony, fiber optic Internet (20Mbps), IPTV (210 SD and 34 HD channels) and mobile telephony starting at US$152 p/m By comparison, Winds triple-play bundle (mobile internet, TV and telephony) starts at US$31, rising to US$61 for the top tier package. Tricoms pricing is aligned similarly. Asters dual-play package is priced at US$22 (256kbps Internet and 36 channel TV). Tricom is investing heavily in fiber infrastructure to expand capacity for the delivery of next generation services. It already has the most comprehensive HD bouquet of all the MSOs, with an expanding 3D catalog also available. This will prove important in the short-to-mid term as Claros IPTV platform gains momentum, offering unique social and connected elements in the process. Aster focuses largely on lower income households, with analog packages still very much at the fore of its current strategy. A full takeover – if given the green light – could help the cabler compete directly with Tricom in the future, although this is unlikely to be the case any time soon. © Informa UK Limited All rights reserved
Next-generation TV - market developments DateDevelopment August 2012BBC Worldwide HD is added to Winds HD bouquet. July 2012Wind Telecom adds Moviecitys 1,200-title VOD service as a premium option, or for free to those subscribing to the MovieCity package. February 2012Tricom launches the first 3D channel in the Dominican Republic; Wild Earth 3D. February 2012Tricom adds 11 new HD channels, including MTV HD, VH1 HD, Comedy Central HD, Nick HD and MGM HD, taking its bouquet to 50 channels. July 2011Tricom adds 15 new channels to its HD bouquet, taking the total to 40. © Informa UK Limited All rights reserved
Viewing and programming DTT TV viewing and programming © Informa UK Limited All rights reserved
Regulator INDOTEL established a public consultation on digital switchover in August It followed this with trials of the DVB-T, ATSC and ISDB-T digital terrestrial standards in November as per CITEL (Inter-American Telecommunication Commission) implementation guidelines. In August 2010 the ATSC standard was chosen for DTT rollout. Initial tests were carried out by government-owned terrestrial channel CERTV, although private channels Telecentro and Red Nacional de Noticias (RNN) also began producing a digital signal by December The government anticipated a 4-channel DTT service launch in mid-2011, with analog switch-off scheduled for However, recent reports suggest the initial 2015 deadline for ASO may have to be revised. The first DTT transmissions began in June Four channels were indeed available at launch; Quisqueya TV, Canal Educativo Dominicano, Canal Legislativo Dominicano and Canal Época de Oro (Televisión Dominicana). Informa research found some 10,000 households to be utilizing the DTT platform as their primary source of viewing at end The government requested support in both production and broadcasting from equipment manufacturers in April DTT © Informa UK Limited All rights reserved
TV viewing and programming Broadcast group ChannelsAudienceKey contentImports Color VisiónHIMQ-TV (Canal 9) General 18-49Infotainment News/Current Affairs Formula One racing Gameshows Telenovelas Corporación Estatal de Radio y Televisión CERTV (Canal 4) Antena Latina General General Infortainment Telenovelas WWE Wrestling NBA CSI: Miami Nip/Tuck The Simpsons Spongebob Squarepants RTV DominicanaHISD-TV (Canal 12) General 18-54News/Current Affairs Grupo de Comunicaciones Corripio Telesistema 11 (Canal 11) Tele Antillas (Canal 2) General 18-54Infotainment News/Current Affairs Telenovelas; SOS Mi Vida Sabor a Ti Lost Two And A Half Men Big Bang Theory Worlds Most Amazing TelemicroCanal 5General 18-54Telenovelas; Amorcito Corazon Amor Bravio La Traicionera © Informa UK Limited All rights reserved
Viewing and programming There are 22 main channels. Most are based in Santo Domingo, although the provinces also have their own radio and TV stations. Many channels can be viewed online. Cable companies provide access to numerous international channels. Color Visión has 98% household penetration. It showcases national talent and events through its schedule, of which 98% is locally-produced. Aqui Estoy is a particularly popular weekday morning show. Telenovelas are the leading genre, claiming the highest ratings in the A and D audience demographics and taking up nearly 50% of TV programming schedules. Reports suggest the total ad market was worth US$390 million in 2010, up from US$368 million in The government is the leading advertiser, with the National Dominican Brewery, Banco Popular, Colgate Palmolive and Grupo Corripio also big spenders. © Informa UK Limited All rights reserved 19 TV advertising
TV forecasts Source: Informa Telecoms & Media © Informa UK Limited All rights reserved IPTV 1% Analog signals dominate at present. Although ASO is scheduled for 2015, Informa anticipates this will be delayed and forecasts some 10,000 homes to still be taking an analog terrestrial service in 2016, down from 788,000 at end The majority of households taking analog terrestrial signals at present will remain in the FTA sector over the coming years, favoring the developing DTT platform instead. Informa forecasts 810,000 households will take DTT as their primary viewing source in However, this will mark a contraction of the FTA sector by some 3 percentage points over the next five years.
TV forecasts The fragmented cable sector will continue to prevail over the forecast period, with 1.1 million homes taking a CATV subscription in This marks a stagnation against present-day rates, although subscriptions will peak in 2014 at 1.4 million. Overall, the market share for the platform will decline by around one percentage point. It is, instead, the satellite players that will see the most gains in the pay-TV market over the next five years. DTH homes will number 162,000 in 2016; almost double those in Claros IPTV platform is nascent, with some 5,000 homes utilizing the service at end Informa expects this total to rise to 20,000 by 2016, equating to a 1% market share overall. Broadband subscriptions will number 798,200 in 2016; - a rise of 67% against end-2011 – with FTTx accounting for 10% of the total at that time. This denotes good prospects for OTT players in the future. © Informa UK Limited All rights reserved
Informa viewpoint Source: Informa Telecoms & Media Dominican Republic, television market scorecard © Informa UK Limited All rights reserved The Dominican Republic demonstrates a TV market progressing steadily, with advanced services such as HD, 3D and VOD becoming a staple of the MSOs service offerings. Claros IPTV service is limited by the reach of its FTTx network at present, although the capital Santo Domingo is covered. It has the financial support of America Movil behind it, which places it in good stead to face coming challenges. As is common elsewhere in the region, Claro have been shrewd in a dual-platform approach to put it on an even keel with the MSOs. The nationwide coverage DTH can give allows Claro to provide an accessible platform as it develops its IPTV infrastructure.
Informa viewpoint © Informa UK Limited All rights reserved Informa notes that the cable sector is fragmented, with over 100 registered operators by end-1H12. Tricom dominates the field, with the most comprehensive HD bouquet of all the pay-TV players, as well as an expanding 3D range. It too is investing heavily in the development of its FTTx network, which can offer broadband speeds of up to 100Mbps in Santo Domingo at present. The extra capacity this infrastructure can provide will prove crucial in the delivery of additional HD and 3D services in future, especially when competing with Claros IPTV platform, which can offer social elements atop other connected benefits. None of the major players break down subscriber numbers, let alone how many take a premium option, but expansion of these advanced/value-added services will prove important moving forward, as DTT establishes itself as a solid digital FTA platform in a nation largely used to FTA analog transmissions and its associated signal quality. Conversely, another method for pay-TV players to combat the threat of DTT will be to continue offering low pricing on their basic digital packages, most of which provide around 50 channels for as little as US$6 per month. Bundling too will aid customer gains and retention. The Informa viewpoint is that prospects are good for the pay-TV players bottom lines as well as for consumers, who will continue to benefit from the fruits of an advancing market.
James McDonald Analyst, Informa Telecoms & Media 24
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