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Bundled virtual pay TV services dominating Turkish OTT market; Netflix and Amazon hold only 5% of SVOD
 12 Sep 2018
A report on Turkish OTT subscriptions from market intelligence firm IHS Markit indicates that bundled virtual pay TV subscriptions from telecom providers Turkcell, Türk Telekom and Vodafone Turkey outperformed the rest of Turkey's non-multiscreen market by almost 4:1 in 2017.

The report titled 'Turkish OTT subscriptions go bundled amid economic turmoil' is authored by Max Signorelli, research analyst, home entertainment, IHS Markit, and Constantinos Papavassilopoulos, principal research analyst, service providers and platforms, IHS Markit.

They conclude that despite Turkey’s recent economic decline, it still boasts the largest OTT video subscriber base in Central and Eastern Europe of 3.9 million subscribers (excluding multiscreen services). Surprisingly, Netflix and Amazon comprised just 5 percent of the Turkish subscription-video market in 2017, falling behind numerous Turkish players, as local content and pricing have proven vital to service success.

When combined with the standalone sector, Turkish virtual pay-TV made up almost 95 percent of the non-multiscreen subscription base along with over 80 percent of subscription revenue in 2017, thanks mainly to the low-cost nature of these bundles offered to existing customers.

"As the bridge between the European and Arabic worlds, Turkey’s OTT market exhibits a highly individual set of characteristics. These characteristics, blended with recent economic hardship and a significant depreciation of the Turkish lira, have molded a market that respects the value of high-quality content, but one that is also growing more conservative with its spending," said Max Signorelli of IHS Markit.

The analysis further asserts that "as many local operators are capitalizing on their position as media and technology conglomerates, to provide OTT media services as part of larger bundles, they are reducing the price of these services to next to nothing. These bundled virtual pay TV services offer first- and third-party channels, both live and on demand, much like Direct TV Now in the United States and NOW TV in the United Kingdom."

However, they are offered either at a discounted rate or exclusively to existing customers of the operator. These players including Turkcell, Türk Telekom and Vodafone Turkey captured 77 percent of the Turkish OTT subscription video market for non-multiscreen service subscriptions in 2017.

"Having claimed the majority of the market, these local players have left Netflix and Amazon with little room. Despite localizing the service in November 2016, Netflix has been unable to readily draw in Turkish consumers to the platform, owing to its relatively high cost and a relative lack of Turkish original content. Even so, the US dollar’s higher value in Turkey will aid international players in purchasing Turkish content for local and overseas audiences in the future," added Signorelli.
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