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June 11, 2010
Modern Times Group (MTG) has boosted its footprint in Sweden, agreeing distribution deals with Swedish cable operator Com Hem and announcing the launch of TV10, a new free-to-air sports channel. The deal with Com Hem, valid till 2013, will see MTG pay platform Viasat selling its premium bouquets directly to the cable company's subscribers, as well as directly marketing its and Com Hem's various TV packages to Com Hem households. Also part of the agreement is the expansion of the Viasat on demand service, which will be made available to all Com Hem digital subscribers equipped with Motorola's HD on demand boxes. Com Hem's network currently has only 800,000 homes enabled for the on demand service, with the remaining homes expected to be enabled by end 2010.
With the launch of TV10, Viasat's FTA channel count in Sweden increases to five. It currently operates three entertainment channels and a music channel, targetting the 15-49, 18-49 and 35+ age groups. Content for the TV10 channel will come by leveraging existing rights, with sports programming currently aired on male-focused TV6 and TV8 being shifted to TV10. Selected content currently available on the Viasat Sport pay TV channel, such as the F1 qualifying sessions and selected games from the Allsvenskan Swedish ice hockey league will also be broadcast on the new FTA channel. TV10 is expected to launch in September this year with a Euro 2010 qualifying match between Sweden and San Marino live. Deals to distribute the channel are already in place with Com Hem.
With the Com Hem deal in place, Viasat now has access to all three major Swedish cable operators - Com Hem, Canal Digital and Tele2, as well as IPTV operators Telia and Bredbandsbolaget (B2) - further cementing its position as one of the majors in the premium pay TV segment in Sweden. With its Nordic DTH business churning subscribers in recent years, Viasat appears to be looking elsewhere for growth opportunities. Given its strong portfolio of channels catering to a varied demographic, leveraging its channel business and becoming (as Viasat describes it) a 'virtual network operator' adopting an 'anywhere, anytime' strategy is definitely a move in the right direction.
As part of its 'anytime, anywhere' strategy, Viasat has also launched subscription-based web TV and mobile TV services. While it is too early to comment on whether either of the OTT services will become successful, especially since mobile TV has been a hard sell in Europe, future bundling of these services for free with the DTH service and providing other value added services which are not available via the virtual network will help to stem subscriber churn, and possibly even help poach some customers from other platforms. Contractual obligations with the cable and IPTV operators prevent Viasat from directly marketing its DTH services to their subscribers. Viasat can however promote its DTH platform and the additional features available via its TV channels, and any unsolicited enquires from partner network customers for taking Viasat's DTH services is still permitted.
The launch of sports-focused TV10 in September this year is a first for the group, which has previously restricted its FTA genres to general entertainment and music. Moving into FTA sports, we believe, will bring in incremental advertising revenue from the traditional sports audience of young males, while TV10 will also be used to promote and upsell Viasat's premium sports pay TV channels. Programming for TV10 will come from FTA channels TV6 and TV8, which currently air lower tier sports content. Selected content from Viasat's sports pay TV channel Viasat Sport will also be aired on TV10, such as F1 qualifiers, with the F1 races will remain on the premium Viasat Motor channel.
The channel also opens another front in MTG's battle with the TV4 group, which operates the TV4 Sport channel, available on extended basic packages of Com Hem, Canal Digital, Boxer and other operators, and owns the C More premium pay business. The recent acquisitions of English Premier League rights in Sweden and distribution of TV2 sports HD channels in Norway upped the stakes further in the Nordic premium pay TV business.
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