From Linear TV Operator to Digital Lifestyle Operator: Tricolor TV summarizes the results of 2017

Tricolor TV, the largest Russian operator of digital television, adopted a new development strategy in 2017, presupposing transfer from a linear TV operator to digital lifestyle TV operator, and confirmed its leading position on the market of paid TV, having shown excellent financial results over the year, with the revenue exceeding 19 bln RUB and ARPU at 1,565 RUB a year. The subscriber database as of the end of the year amounted to 12.28 million households.

Tricolor TV continued showing high growth of financial indicators. Over the past few years, the operator almost doubled their revenue — from 10.4 billion rubles in 2014 to 19.1 billion rubles in 2017. Annual revenue growth amounted to 7%, ARPU grew by 70 rubles and reached the mark of 1,565 rubles per year. These figures are in line with the operator's plans for 2017.

From January 1 to December 31, 2017, the number of Tricolor TV's digital TV subscribers increased by 140,000 households: from 12.14 to 12.28 million Russian families. The number of HD subscribers reached 78% of the total subscriber database, reaching 9.6 million households (growing annually by 13%). HD subscribers constitute 100% of new subscribers of the company.

Director General
The number of new connections on the paid TV market in Russia has been going down over the last several quarters. This is a normal and natural situation for a saturated market. Further development will depend on showing better financial indicators, new expanded product line offerings new digital services, as well as through access to markets of related industry sectors. The leader on the market today is the operator who can offer a comprehensive digital product that meets the basic needs of contemporary citizens of the digital world. Last year, we started the transition from being a linear TV operator to becoming a digital lifestyle operator, launching new comprehensive digital service packages in the Far East. We will continue working on new products in 2018, shaping high tech modern digital offerings.

The new development paradigm of Tricolor TV incorporates the changing model of content consumer’s behavior as well as transfer of main communications into the digital environment. In 2017, the company started work on transforming its business model from being a linear TV operator to becoming a multi-platform and multi-media digital lifestyle operator. The company’s main product today is a unified offer of digital services, including TV viewing. Tricolor TV has shaped a new type of operator for the Russian market, which takes into account the main trends of development in the sector and seeks to meet the demands of today’s consumers.

Residents of Russia’s Far East were the first to try a new comprehensive digital service of Tricolor TV, as the company continued to improve its TV viewing offering. As the company entered a new market, high-quality modern digital television from the leader of the Russian paid TV market became available all across the country.

Developing non-linear television viewing, Tricolor TV takes into account the uneven availability of the Internet across Russia and effectively uses the advantages of satellite technology, offering subscribers a full range of non-linear services that do not require an Internet connection. The company has also been working quite successfully on creating hybrid product offerings. In 2017, the operator introduced a unique recommendation service — Best on TV — that does not require internet access, plus content management tools, such as TV Archive and Watch from the Beginning. Additionally, the operator launched the Online TV module, which allows subscribers to watch some 200 TV channels online. By the end of 2017 access to this service was provided to 3 million subscribers of Tricolor TV; the TV Halls service (watching videos on demand) has been used by 7 million Russian households.

In 2017, Tricolor TV continued working on improving the quality of signal and TV image, including the new HEVC video compressions technology that allows using satellite capacity more effectively without sacrificing TV signal quality, which is especially important for development of the Ultra HD format. Over one year the database of HEVC subscribers doubled and now amounts to 2.9 million households. The operator is also working to improve its UHD offering. Today Tricolor TV offers six UHD TV channels, this is the largest number of TV channels of ultra-high definitions accessible to Russian viewers.

Implementing new approaches to development of the company’s strategy, Tricolor TV offered its customers in 2017 the possibility of getting unlimited high-speed internet access. This offering, unprecedented for Russia, helped accelerate the market of satellite internet and allowed the operator to take up 7% of the market from the time when the service was initially introduced in 2016.

The B2B segment has become yet another important aspect in the work of the operator in 2017. Flexible personified customer relation policy, improved package options, including launching a sport TV package, as well as formation of a flexible tariff plan for corporate users and Satellite Internet service users allowed Tricolor TV to more than double the number of B2B subscribers. Tricolor TV Territory became yet another unique service provided in partnership with Eutelsat operator. The operator’s corporate clients now can arrange free access to popular Tricolor TV channels on their territory, which they can view on their mobile devices.

The transition of Tricolor TV from the operator of linear television to the digital lifestyle operator involves launching in 2018 of a large-scale platform that opens access for users to various digital services, non-television services and entertainment opportunities. Tricolor TV will also work on improvement of the product line, interactive and hybrid services, and introduces smart home technologies. The company will also expand various activities in accordance with the Tricolor TV’s new strategy.

Link to application: Tricolor TV: Events and Figures of 2017 in Detail

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