AN EXPENSIVE PLEASURE?

The international pay TV market has long since been a mass market. It takes in billions of dollars in revenues. The Russian market, the so-called "Pay TV", whose revenues are already close to $1 billion a year, also demonstrates an enviable growth rate. But while, previously, the lion's share of the international market belonged to the satellite TV channels, today cable TV and internet providers are increasingly more aggressively involved in the struggle for customers' money. In other words, the cable TV market is increasingly competitive. The same trends are noticeable in Azerbaijan, where the majority of citizens prefer "dishes" and "cables," having left behind the traditional TV antennas of the past. Thus pay TV will become an independent business in the foreseeable future. But how developed the business is, and whether supply is keeping up with the growing daily demand, is a subject for a separate discussion.

There is demand, but there is too little supply!

Let us begin by saying that satellite TV became popular in Azerbaijan quite some time ago, but the real boom started when the free terrestrial broadcasting of Turkish and Russian channels was discontinued. So, regardless of its tastes and material well-being (which is also important), the Azerbaijani audience had to tackle the problem using satellite dishes or cable TV. We do not know whether the "cable guys" did not carry out marketing and opinion surveys, or whether they lacked the infrastructure - but, paradoxically, the fact remains: both at that "key" moment and even now, one year later, the cable TV network in Azerbaijan still has quite poor coverage. And never mind the country - even in the capital only relatively few citizens can subscribe to CaTV (or CaTV-1) which offers packages of  between 45 and 52 domestic and foreign channels of quite a broad range of origin - from Turkey and Russia to the United States - for AZN 9 per month. And to this day, residents of the very centre of the capital, in the Sabail and Nasimi districts, still cannot subscribe, while CaTV is available in the relatively remote Nizami, Yasamal and Xatai districts.

The price of cable TV in Baku is another issue. In not-too-distant Moscow, a similar package costs subscribers (in Azerbaijani currency) not 9, but a little over 2 manats.

Naturally, comparing the 1 billion-dollar Russian cable TV market with the Azerbaijani market is not really possible. But still, not everyone in Azerbaijan can afford to wire his or her apartment with CaTV cables or those of another provider, B&B TV, which offers its customers not one, but three packages: a 35-channel package for a monthly payment of 7 manat, a 62-channel package for 17 manat, and an 83-channel package for 27 manat. After choosing the package, the subscriber must pay two months' fee in advance.

Interestingly, the National TV and Radio Broadcasting Council argues that the "prices of cable TV services in Azerbaijan are practically minimal."  Council Head Nuseravan Maharramli, "the cable TV providers are allowed to operate in accordance with market rules," and they can "regulate themselves" on all other issues, including on prices.

Both CaTV and B&B TV told R+ that "no changes of tariffs are planned in the near future."  However, CaTV-1 President Samir Qurbanov said about the pricing policy of his company that, "following the example of mobile phone network operators, who from time to time reduce their tariffs; CaTV-1 plans to reduce cable TV tariffs as its customer base grows." As the number of company subscribers "is steadily growing" however, it is hard to say when the tariffs will decrease.

And here are today's statistics: today, 12 cable TV providers hold operation licences (LG Telecom, ART, B&B, Neptun, CaTV etc.) but only three of them are actually operational. According to the National Broadcasting Council, some 40,000 households subscribe to cable TV, in other words, the estimated number of people who use this type of TV service in Baku is about 130,000. The council notes a permanent growth in the number of subscribers, which is quite understandable given the vacuum which occurred in TV last year.

The future belongs to Internet

Despite the above-mentioned shortfalls, cable TV is gradually replacing satellite TV because, as one subscriber put it, "satellite TV has become quite affordable and a popular form of entertainment, but given the shoddy, poor-quality of installation work, everyone has problems, sometime because even the subscribers themselves do not know how to operate their equipment."

Incidentally, it was precisely the Broadcasting Council's decision to stop broadcasting foreign channels which caused the unprecedented demand for satellite dishes. There were queues at the companies which sold them. People had to buy two dishes for one TV set to watch both Russian and Turkish channels, which makes many buildings in Baku look like stumps overgrown with mushrooms.

However, buying the coveted dish does not guarantee the customers uninterrupted, good quality service. The cable service is better not only because there is no extra equipment in the form of a tuner (tuners) and remote control(s) in the subscriber's apartment, but also because the provider companies are responsible for the quality of their service. You cannot watch your TV because the wind has moved your dish or it is covered with snow? That is your problem and most subscribers have to phone a specialist because not everyone can go up to the roof. And sometimes specialists are needed not only to install the dish, but also to set up the channels, which often change their frequencies. And if you cannot find the new frequency on the internet, the service, which is called "resetting the tuner", is AZN 6 or more.

The IPTV technology is different. Many people ask why an internet provider would be interested in TV. But for a broadband internet provider (this segment of the internet service is at a rudimentary stage at present), a pay TV service is a good way of increasing the customers' average monthly bill.  In other words, any provider who charges its subscribers from AZN 20 a month for broadband internet access can increase this sum by at least another AZN 5-20 (in Russia - $2-10). The broader the range of services, the higher the provider's revenue. And this is convenient for customers too, because they will use only one cable, not only for the Internet and TV, but also for a security system (direct connection to a security services can be set up) which perhaps sounds somewhat surreal in Azerbaijan today. But in Russia this is already an ordinary occurrence and increasing numbers of Muscovites, residents of St Petersburg and other citizens of the Russian Federation choose combined broadband services. Furthermore, some internet providers, like Tsentralnyy Telegraf, supply TV services free of charge, as a bonus for subscribers to broadband internet. The company decided to include television in their range of services first and foremost to demonstrate to its customers the difference between analogue and digital TV and to let them experience all the benefits of digital broadcasting. The same type of services could also be introduced to Azerbaijan.

Greater revenue is not the only reason why providers add TV to the internet. The more services the customer receives, the more loyal he or she is to the provider. In addition, in developed countries, digital television is already spreading. But records show that TV is not yet an engine of growth in revenues for Azerbaijani providers, who still attach greater importance to internet services, because broadband services are not yet widely available. There is an argument that, in developed countries, the internet has a much wider spread than in Russia or Azerbaijan. But satellite TV occupies a very special niche in Baku: it provides services in areas which cable TV providers do not yet cover. So it may already be said with certainty: sooner or later, interactive cable services will sideline satellite broadcasts as they develop, because the "dish" service is unidirectional and therefore cannot be interactive. At the same time, satellite TV providers can also start providing combined services, either through technological improvements, in partnership with other companies, or by using several technologies in one company.

Let us return to the current state of affairs, however. We have already mentioned that because of the absence of cable TV coverage, people cannot watch their favourite TV programmes. But this is only one side of the problem. You must agree that many of us ask the question why, even in the capital, providers cannot meet the demand for cable TV services? Maybe this is because the cable TV market is monopolized by two or three players? It is very difficult to supply answers to these questions. According to the National Broadcasting Council, more than 44 TV and radio organizations are in operation in the country today, including 21 TV and 11 radio stations, as well as 12 cable TV providers, of which the majority are not functioning. In addition, three foreign radio stations and one Turkish TV channel, TRT, broadcast in Azerbaijan.

We can only hope that the National Broadcasting Council management will not follow the example of the Turkmenistani authorities, who last year launched a campaign against satellite dishes (which for many residents of the country are the only source of independent information) and will instead manage to create an environment for the functioning of several tens of cable TV providers, which alas is not the case today.