Kate Bulkley, Media Analyst.

Despatches. Looking East for the key to pay TV

By Kate Bulkley

The Guardian

Monday Sept 11, 2006

The following correction was printed in the Guardian's Corrections and clarifications column, Wednesday September 13 2006

In the report below we said that "at the moment they [Russian language speakers in the UK] can only receive programmes via a 1.5m steerable dish". This is incorrect as RTR Planeta and Channel 1 Russia are available (without subscription) on Eutelsat Hot Bird at 13 deg east using a fixed 800mm dish.


Television

Looking East for the key to pay TV A new player is about to enter the already competitive pay-TV market - a Russian service aimed at 500,000 expats in the UK.

The venture is one of a series of niche TV channels that will be delivered to subscribers over the internet, and eventually to broadband-enabled TVs.

Headed by ex-Sky TV commercial director Martin Goswami and Chris Griffin, who has worked at ITV as well as MTV, MoŽ TV (My TV) will broadcast more than 500 hours of programming.

This pay-TV service, which was funded with £9m of venture capital money, looks set to be the latest broadcast model, especially as the number of broadband homes rises.

Customers can pay for it on a per-view basis of 99p to £2.99 per programme or by an all-you-can-eat monthly £15 subscription. So far the fledgling company has spent roughly £150,000 on infrastructure and £75,000 will be spent to market the service to the UK Russian community. At the moment they can only recieve Russian programmes via a 1.5 metre steerable satellite dish.

Goswami and Griffin say that the break-even subscriber number for their company, which is called Aggregator, is just 80,000 subscribers.

Griffin, whose wife is Russian, says that getting the content right is key to the service and Aggregator has bought rights on a revenue share basis to everything from news to drama to kids' programming.

The company plans to have up to three more channels launched before the year's end. "This Russian channel alone is not a big business by itself, but the platform we are building on is potentially a big business," says Griffin.

But those sceptical about the Aggregator model say that the big players such as Sky, which has already launched its Sky-by-broadband service free to premium subscribers, are more likely to win out because they bring together in one place the most attractive content.

Arash Amel, head of broadband digital media at Screen Digest, reckons 70% of all online TV revenues will come from advertising (the content will be free to users) by 2010. "There are very few success stories with online subscription TV services," he says.

 

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