03/10/2013 Chris Dziadul Chief East European Analyst 1 03/10/2013 } Dynamic and competitive digital TV market, but beset by problems } Some of these problems (e.g. DTT mux licence dispute with EC) have international dimension } Others are local, between leading market players } Piracy a major issue } High pay-TV penetration } Broadband leadership } 3m households, of which between 2-2.5m receive pay-TV services } Top three pay-TV companies together have 1.5m subs: Bulsatcom (DTH) 900,000; Blizoo (cable) 400,000; Vivacom (DTH) 200,000 } M-Tel (IPTV) has 60,000 subs, other players a combined total of 500,000 } DTH market growing, cable TV contracting, IPTV still in infancy (total: <100,000 subs) 2 03/10/2013 } bTV and Nova TV: Bulgaria’s two leading commercial broadcasters, backed by CME and MTG respectively. Both have a portfolio of channels } BNT: national public broadcaster } TV7: commercial station } Tough for the industry: TV ad market shrunk by 30-40% between 2008-12 } Underlying problems still exist between programmers and distributors following recent Bulsatcom/bTV and TV7 carriage dispute } Subscription fees very low, holding back market growth } VOD, OTT (HBO Go, Voyo) services exist, but still early days 3 03/10/2013 } Analogue switch off completed September 30, but country not 100% ready } Dispute with EC still ongoing. How serious is it? } Piracy a big issue: Zamunda and Arana most popular sites. Are the main studios taking it seriously enough? } Market in a state of flux, especially DTH sector (closure of Satellite BG in June) } Blizoo is up for sale. Currently owned by Swedish investment group EQT and likely to attract a lot of interest } Neterra/Telenor Satellite Broadcasting cooperation: huge potential to impact on Bulgarian market } General uncertainty in the digital TV marketplace 4 03/10/2013 } Many of the problems currently seen in Bulgaria are also being experienced in other CEE markets, especially in the Balkan region } There is still strong interest in Bulgaria by outside investors. Leading players such as CME and MTG, along with Telekom Austria, look committed to the country } Growth will start to pick up when the economic situation improves. However, that could still be some time off. Chris Dziadul [email protected] 5 .