German platform operator Media Broadcast has launched the satellite version of its DVB-T2 platform Freenet TV for DTH households in Germany on Astra (19.2° East).
The TV line-up comprises the HD versions of the 19 commercial free-to-air channels offered terrestrially and three additional channels. The subscription price is identical to the DVB-T2 version with €5.75 per month. The first three months are free. Customers can also opt for a one-year pre-paid subscription for €69.
Freenet TV via satellite competes with the HDTV platform HD+ offered by Astra satellite operator SES which has been the only provider marketing the HD versions of the commercial free-TV channels to German DTH households since its launch on November 1, 2009.
Two competitors are now entering the market almost simultaneously. On February 14, 2018, M7 Group, which was previously only active in the German B2B market as a channel and service supplier for network operators, launched its DTH platform Diveo for satellite households. Unlike Freenet TV which only offers free-TV channels, Diveo also includes pay-TV services.
At a press conference in Cologne at the occasion of Freenet TV’s first anniversary and the satellite launch, Christoph Vilanek (pictured right), CEO of Media Broadcast’s parent company Freenet, recalled that people laughed at him when he presented his plans for a DTT platform two years ago, arguing that this was old technology. “Now we have 2.5 million users.” Of these, over one million are paying customers of Freenet TV. By the end of the year, the target is “well over 1.2 million,” said Vilanek.
A major part of the growth is expected from the satellite launch taking place on March 28, 2018, one year after the DVB-T2 launch. The move unveiled by Broadband TV News in June 2017 will enable Media Broadcast to reach households outside the terrestrial coverage area and to tap into Germany’s large DTH satellite community: 47% of German TV households have opted for DTH, corresponding with 18 million households.
Technically, Media Broadcast handles the satellite distribution of the HD channels the same way as M7: The Freenet TV encryption system is added to the existing broadcast signals, as Media Broadcast CEO Wolfgang Breuer (pictured left) explained. With HD+ and Diveo, the channels are now carrying conditional access information of three different providers. The transponder capacities are rented from SES by the TV broadcasters. On Astra, like on DVB-T2, Freenet TV uses a cardless encryption system from Irdeto.
Since the broadcasters transmit their channels on Astra in 1080i, Freenet TV cannot offer DTH households the higher Full-HD quality level 1080p employed on DVB-T2. The video quality on DTT is therefore “slightly better,” said Breuer. He explained that it was not an alternative to rent separate transponders to broadcast the channels in 1080p because of the associated high costs of €15-20 million per year. “Then the case is dead.” In order to recuperate the higher costs, Freenet TV would have to demand a monthly fee of around €15 from DTH viewers. They wouldn’t be willing to pay that, he’s sure.
The target group of Freenet TV via satellite are primarily households that still have an SD satellite receiver or already have HD reception hardware, but still watch the commercial free-TV channels in SD resolution. Freenet TV offers an HD satellite receiver and CI+ module for them respectively. The module costs €79.99 (recommended retail price). The Digit S4 Freenet TV receiver from German manufacturer TechniSat is available for €109.99 (recommended retail price), but is expected to be offered by many retailers for €99. Media Broadcast wants to certify two to four further boxes from other manufacturers for satellite reception of Freenet TV, according to Breuer.
The work involved in preparing the satellite distribution of Freenet TV was relatively modest, said Breuer, not least because a lot of preparatory work had already been carried out for the DVB-T2 launch such as setting up the billing system. The existing CI+ modules and pre-paid subscription vouchers also suitable for the satellite version. The greatest effort by far had been concluding new contracts with the TV broadcasters since the old agreements only covered DTT, according to Breuer.
But how does Media Broadcast want to succeed in convincing customers of its offer which is largely identical to HD+ and costs the same price? “We are hungry, ambitious and want to grow,” said Breuer, adding with regard to HD+ and its parent company SES that Freenet’s business is the end-customer while its competitor mainly wants to sell transponders.
Freenet also had better sales structures and access to 9 million Freenet customers, thus, a lot of potential for upselling, Breuer explained the estimated market opportunities. Vilanek added that distribution of the product though its 600 high-street shops provides a “huge advantage” for Freenet. Employees will actively ask the visitors of the shops whether they want to receive the commercial channels in HD quality. According to his personal impression, the public is hardly even aware of the fact that the commercial channels are available in HD resolution.
HD+ subscriptions stagnated at 2.1 million paying customers in 2017. In view of the total of 18 million satellite households in Germany, Breuer sees great potential for Freenet TV. He expects the trend in TV set sales towards larger screens and the discussion about SD switch-off on Astra to provide additional upturn.
At launch it will not be possible to receive Freenet TV on Astra through the receivers and smartcards from pay-TV operator Sky Deutschland as it is the case with HD+. But Vilanek would be open to such a cooperation: “If there’s a tender, we will take a look.”
Freenet TV via satellite comprises the 19 channels distributed via DVB-T2 including the channels of the two major commercial TV broadcasters RTL and ProSiebenSat.1 as well as MTV HD, TLC HD and Insight HD, as Jörg Brühl, Director Marketing & Sales Freenet TV at Media Broadcast, explained. He pointed out that the channels forming part of the line-up have a 95% share of the viewer market.
Diveo carries pay-TV channels on its platform, HD+ also offers a pay-TV channel, namely Eurosport 2 HD Xtra. But for Freenet TV, pay-TV is not an option. “I don’t believe in linear pay-TV, except in sports,” said Breuer, adding that the days of waiting for 20.15 CET to watch a movie are over. He is convinced that film and series consumption will shift to on-demand services such as Amazon Prime Video or Netflix. The consequence: “Linear pay-TV will die.”
According to Vilanek, the declining attractiveness of linear pay-TV channels is also reflected in the fact that Sky Deutschland has recently removed so many third-party channels.
Through its accompanying OTT service Freenet TV Connect, Freenet TV offers DVB-T2 and DTH households access to on-demand and interactive services such as the catch-up portals of the TV broadcasters and apps. The livestreams of linear TV channels part of the DVB-T2 version of Freenet TV Connect are not offered to DTH households, though, as these channels can be received as regular satellite channels on Astra.
