Published: 20.44 Europe/London, June 21, 2011

DIGITAL TV CEE – BUDAPEST. DTT services are likely to cause major problems for the pay-TV business in Central and Eastern Europe.

Revealing the findings of a new region-wide survey undertaken by the Mirek Smyk Consulting Group (MSCG), the company’s founder and owner Mirek Smyk said that there were already 2 million smart phone owners in Romania, and of them more consumed video content on their PCs (88%) than TVs (53%) at home.

Moreover, one third would consider cord-cutting cable TV in the next 2-3 years.

In Smyk’s view, there is an unwillingness to pay monthly subscriptions that will become more apparent among educated users who see that they can have 25-30 DTT channels and additional content via broadband for free.

To combat this, pay-TV needs to focus on something new, and there are already signs that SD channels are being offered for free and HD ones charged for.

In markets such as Romania, where the urban and rural pay-TV penetration rates stand at 95% and 76-77% respectively, there is no possibility to create value.

Smyk was critical of the business models in Romania adopted by HBO, whose service HBO Go recently launched to a potential audience of under 1,000, and the local online video services Muvix and Dolce TV, that latter of which has under 2,000 paying users.

Smyk’s conclusions were that telecom/pay-TV operations will fail with the deployment of DTT; DTT in CEE will become a completely linear TV distribution platform at the expense of DTH, “but cable will take the lead anyway”; ASO dates are largely irrelevant; and Euro 2012 will become a breakthrough event for CEE live and on demand broadcasting.