US DTH operators proiftable in 7 years
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ThE MaStEr
2010-10-20
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US DTH operators proiftable in 7 years
October 20,
Dish Network and DirecTV in the US both achieved profitability close to 7 years in operation at a penetration of approximately 7% of television households. According to US research firm NSR these benchmarks generally hold true for the vast majority of DTH markets the world over.
For most platforms in Central & Eastern Europe, the magic number averages close to the 500,000 subscriber mark. A look at individual countries reveals that for Romanian platforms the figure stands at about 300,000 subscribers, whereas for Ukraine it could be as low as 100,000 subscribers to achieve profitability.
Platform N, based in Poland, is yet to achieve breakeven despite crossing the 700,000 subscriber mark last year. It is largely understood that the cost of providing relatively advanced equipment has kept them from turning profitable. Other platforms in the country such as Cyfrowy Polsat and Cyfra+ managed the same feat with anywhere between 400,000 and 600,000 subscribers after a mere 5 years in operation.
As shown in the figure here, DTH subscriber growth continues to be healthy for the industry at large, and NSR expects the numbers to scale well over 200 million by 2019. However, ARPUs are being pulled downward by the millions of subscribers that continue to be added in South Asia and Central Europe at single-digit ARPU levels.
Emerging operators in South Africa have based their business models on breakeven at about 300,000 subscribers over 3 years. This again translates into roughly 6.7% of television households in the country. Although Africa may prove to be more of a challenge given the dominance of the incumbent provider, NSR believes that operators will be able to find their niche in one of the fastest growing television markets in the world.
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