Bulgarian TV market – well established yet exciting
The Bulgarian TV market is very competitive and dynamic due to loose regulatory framework. The government resists pressure from incumbent market leaders to regulate further, which provides numerous investment opportunities even for small companies. Local legislation is fully compliant with EC regulations, which guarantees certain transparency and stability in the market.
Although pay TV penetration exceeds 85% of the households and there are several well-established companies in the market, mergers and acquisitions are still on. The established pay TV providers such as A1, Vivacom and Bulsatcom, all offer cable, DTH and provide cable internet connectivity. Bundled prices start from EUR 12 per month. While the major telecoms compete on pricing, reaching down to EUR 6 for a monthly DTH subscription plan (40 SD channels), other local operators expand their networks day and night to provide diversification of pay TV offer and ISP in different regions of the country. The majors hold about 70% of the pay TV market while the other 30% are shared between more than 200 operators, the majority of which are SMEs.
The competition is fierce not only in terms of pricing but also in terms of the range of channels and quality. High-end packages include 200+ channels with 20% HD offering 200 MBps home internet connectivity for EUR 20. Other operators compete with the major players in quality of picture and rapid response to complaints. Others provide a local approach and provide quality service at the POS – a friendlier environment for senior citizens, while the major players currently try to transition their clients to purchase and pay online via the mobile app, reducing the costs of operations even further. This may look like the Wild West of TV, but out of 236 registered pay TV distribution companies only 7 very small firms closed last year, which is a negligible figure and shows robust demand and significant market potential despite the increasing concentration.
At the end of 2017, there were 1.82 million pay TV subscribers in Bulgaria, out of which 864.298 were subscribers for satellite television. DTH and cable have held relative parity for a decade now. Both lost 1-2% in the past couple of years due to IPTV penetration. Satellite has a less volatile client base due to expanded geographic penetration, especially in the “second home” segment. In the past this was a DVB-t territory, but the DVB-t multiplex had a bad start in Bulgaria and the whole segment is now slowly dying. The transition to digital however succeeded and today more than 95% of the subscribers receive digital signal. On the other hand, in the cities IPTV is on the rise. Natural gas grid penetration provides infrastructure for the IPTV growth, especially in the expensive neighborhoods of the capital. The mobile internet penetration of 92% may provide fuel for the next major restructuring of the market as more people watch TV on the go. Telecoms provide free of charge testing of the mobile to service, duplicating the cable or DTH household TV subscription plans. Some telecoms offer this option free of charge to compliment the primary services package.
The Government plans re-farming of the 694-790 MHz bandwidth, which will again give rise to new investments in the communications sector and new opportunities to bundle services in a competitive offer. Previous reframing attempts were not very successful as an unexperienced operator made significant investments to pay the new frequency license for LTE service but was unable to bundle it with voice or TV to really compete with the majors.
Bulgarian viewers are fond of the local channel offering, closely following news, soap operas, movies and sports. Travel, leisure, and nature related programs are also popular. English language channels are popular though the language proficiency is not that high especially among the more senior citizens. Turkish channels are even more popular due to the diverse ethnic structure of the nation. Precise audience figures for the market are not available as the local people metrics are unreliable.
As evident from the above, the local pay TV market is well established but still dynamic and exciting. Companies need to constantly keep an eye on the competition, offers, pricing, quality of service, new technologies and mobile apps and other aspects of operations to be successful and to really bond with the viewers.