The Pay TV market is entering exciting territories with the advent of network PVRs, catch-up and start-over TV – new services that require new deals with rights holders. Some operators are being innovative with these services, others have been slower to wake up to their potential. One IPTV operator that has seized the opportunity is Hungary’s Invitel. As part of a series of interviews with next generation platforms, 3Vision spoke to its Head of TV services to find out more…

“When we started content negotiations almost three years ago it was terribly hard,” says Aron Javorniczky, Invitel’s Head of TV services. “It took about a year to get agreements. But now this market is really opening up.”

Invitel Telecommunications, Hungary’s second biggest fixed-line telephone operator, launched IPTV services in May 2008. Its ‘InviTV’ service offers a range of On Demand services (VOD, SVOD and catch-up TV) and also gives subscribers access to their own space on a network PVR.

The operator, which aims to carry almost all the channels that are available on the cable networks of operators such as UPC and T-Home, currently offers 79 linear channels. The company will not yet disclose how many TV customers it has recruited, but has 160,000 DSL customers on top of its 730,000 voice telephony customers.

Invitel now has agreements with around 40% of its channels which allows subscribers to record programmes to their personal space on the network PVR. Added to this, around a third of its channels are available on the ‘Yesterday’s TV’ time-shift service allowing viewers to catch up on their favourite shows. Both the network PVR and the time-shift service are bundled with all TV subscription packages.

Among the broadcasters that resist allowing their channels to be recorded on the network PVR’s servers are the German commercial channels such as RTL, Sat 1 and ProSieben as well as HBO group and the state-owned m1 and m2. But Invitel has agreements with international broadcasters such as Discovery and Viasat (for its History and Explorer channels). It also has deals for partial rights for local channels including TV2 (owned by ProSiebenSat.1) and Chellomedia’s Sport1 and Sport2.

According to Javorniczky, “Yesterday’s TV is the heart of the service.” Programmes are stored centrally so that they can be provided on request via secured unicast streams. For technical reasons – concerning the limitations of the electronic programme guide (EPG) – the service does not offer “series stacking”, where a customer can click once to record all episodes of a series, but regular programmed recording is available via the EPG.
 
With TV2, not all content is available. Invitel is able to store the broadcaster’s own programmes – such as news and entertainment shows – but not films and other material bought in from third-party providers.

The operator has agreements with two local rights collection agencies to which it pays a monthly subscriber fee. In most cases it has negotiated time-shift rights with the channels for three days, but in some cases the period is only 24 hours.

Javorniczky was unable to disclose details of payments to broadcasters for the time-shifted services. “Do we pay more? It is hard to answer as the price is not fixed,” he said. “If you have long-term deals – four to five years for example – then you get better conditions, maybe get those rights even for free. Usually there is compensation for the extra formats, but not always in form of payment. It could be in subscriber guarantees, in how the channel is packaged or in where we put it on the EPG. But in some cases there is payment for the added functionalities.”

Network PVR

Customers have their own storage on the network for free as part of the basic subscription – five or ten hours depending on the package they take. Invitel’s cheapest triple play basic package (25 channels) costs HUF6,200 (€22) per month, the most expensive (45 channels) HUF12,970 (€46) without the premium and thematic mini packages. Subscribers can buy extra storage for €0.90 per month per 10 hours.

Javorniczky said that the new services enabled Invitel to differentiate its TV offering from that of the cable operators. So far, they have proved even more useful in retaining customers than in attracting them as it takes time for subscribers to become familiar with “Yesterday’s TV” functionality and to change their TV viewing habits.

“We thought it would help a lot with sales,” he said. “It does help but not as much as we had thought. But it helps significantly in customer retention. Customers who have it won’t go to an offering that does not have this functionality.”

On top of that, having programmes recorded at the head-end of the service provider – rather than on a set-top box in the home – provides a strong disincentive to churn and thereby lose the recorded programmes.

The Discovery and Viasat factual channels are among the most popular on the Yesterday’s TV time-shift service. Javorniczky says, “Nature and history channels are very popular. These channels have a lot of interesting and good programmes in the daytime which means some people can’t watch them live.”

VOD

Invitel also offers a VOD service which includes more than 400 titles from local distributors such as Budapest Film, SPI and also major international content providers, available on a pay-per-view basis, priced between €1.50 and €2.50.

It also operates an SVOD service in conjunction with HBO which includes films from HBO’s line-up. The SVOD service, updated weekly, offers between 80 and 90 films. It is offered, at present, as a bonus service only to subscribers who take the extended package of five HBO channels.

Invitel has shown great innovation in adopting the network PVR and the services it enables and in handling negotiations with rights holders – difficult negotiations because these services are still so new. It has stolen ground from its longer-established cable competitors and set an example to other operators across Europe.

September 22nd 2009