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UPC, Sky shake up Swiss TV market

Thursday 18 January 2018 | 14:30 CET | Background
The Swiss TV market has seen some major developments in the past year, starting with the introduction of MySports by UPC Switzerland. This was followed by the launch of an OTT sports package by Sky Deutschland and licensing deals between Sky and UPC, and Swisscom’s Teleclub with Eurosport for German Bundesliga football rights. The basic MySports channel has been rolled out to all members of Swiss cable operator association Suissedigital, helping slow TV customer losses in the third quarter. Sunrise also claims that the Sky Sports deal drove quarterly TV growth, while Swisscom saw its net additions drop and plans to add more HBO content to overcome the slump.

MySports unveiled with ice hockey rights as base

In July 2016, cable operator UPC confirmed the launch of a new live sports channel in Switzerland called MySports. The channel secured five seasons of Swiss ice hockey games from the 2017/2018 season as its anchor content. UPC acquired the TV rights to Swiss national league A and B ice hockey games as well as games involving the national Swiss team and the Swiss Regio league. The company also signed contracts with the Swiss basketball association to broadcast between 20 and 23 basketball matches from the NLA league in the 2017-2018 season as well as acquiring distribution rights for the Bundesliga German men's football league via a partnership with Sky Deutschland. All the Bundesliga matches for which Sky owns the rights will be shown exclusively on MySports in Switzerland.MySports launched in September 2017, and the basic TV channel is available for all Swiss cable operators that are members of the Suissedigital association. In addition, there is a premium TV package called MySports Pro with more channels for UPC customers only, including Eurosport 2, two Sky Sports channels and German sports channels Sport 1 US, Sport1 and Sportdigital. This offers access to live Bundesliga, Dutch and Portuguese football matches as well as US sports. MySports Pro costs CHF 25 per month, and a MySports Day Ticket is available to all digital TV customers for CHF 9.

Swisscom files competition complaint, loses in first round

In April 2017, Swisscom filed a complaint with Swiss competition office Weko against UPC for failure to open up its exclusive hockey TV rights to all operators. Swisscom claimed that UPC was abusing its dominant market position, as it had not offered its new TV channel MySports to all pay-TV operators, but only to cable operators. UPC argued that it does not hold all hockey rights, as Swisscom can still carry other leagues and competitions. In July 2017, Weko found that there was no reason to grant Swisscom's request for provisional measures to limit the impact on competition from UPC's offer. While this may constitute an anti-competitive practice, UPC's refusal to offer the channel to Swisscom will not lead to an irreversible or long-term change in the structure of the pay-TV market. The decision can be appealed in court.

 

Meanwhile’s Swisscom’s co-owned premium TV operator Teleclub signed an agreement with Discovery Networks Germany for sub-licensing of German football league broadcast rights. Discovery's Eurosport acquired the exclusive rights to show selected Bundesliga matches in Germany, Austria and Switzerland, and Teleclub acquired an exclusive licence for its home market.

Sky enters Swiss market as OTT provider, cable operator Quickline follows

Although Sky’s channels are part of the MySports Pro channels, Germany-based premium TV operator Sky Deutschland also launched its channels as an OTT service in Switzerland. Sky Sport costs CHF 19.90 a month or CHF 9.90 for a daily pass. The operator also partnered with Swiss operator Sunrise to market Sky Sport, starting with a promotion offering three months free for new and existing customers. In December, the Sky Sport app was added to the set-top boxes of Sunrise, UPC Switzerland and Swisscom as part of Sky’s plan to became available on as many platforms as possible.

In September 2017, Quickline, an association of 24 Swiss cable operators, launched a free national OTT service without advertising. The service is called Quickline TV Air Free and is available free for customers with a broadband connection at any of the providers. The service offers access to 130 TV channels, including the new channel MySports HD, 30 hours of replay, 10 hours of recording and personal profiles.

Cable operators claim lower churn in Q3 due to MySports

Swiss cable operator association Suissedigital reports that its members lost 11,800 TV customers during the third quarter of 2017. This is 10,000 less than the net customer loss in Q2 2017 and much lower than the average quarterly loss of 31,000 reported by its members during 2016. The association claims that the reduction is due to the MySports TV offer available on nearly all Suissedigital cable networks.

UPC Switzerland reported that it won more than 26,000 customers for the MySports Pro package at the end of Q3 2017. In addition, more than 3 million homes in Switzerland receive the basic channel, MySports Basic, of which 1.22 million are UPC TV customers. At the same time, the number of TV customers at UPC decreased during the quarter by 10,500, similar to the other quarters in 2017, but lower than the quarterly losses in 2016, which averaged around 13,000.

Sunrise claims higher TV growth due to Sky Sport

Sunrise reported net TV additions of more than 13,000 during the third quarter of 2017 to pass the 200,000 TV customers mark, ending September with a total of 200,900. The quarterly additions were higher than in the other two quarters of 2017 and the average quarterly growth in 2016 of slightly more than 7,000. The operator claims that the TV growth was driven by the enhancements to its TV service, including Sky Sports and dedicated promotions.

Swisscom saw its quarterly net additions decrease from an average of almost 22,000 during 2016 to around 12,000 in 2017. The 6,000 net additions during the third quarter were a new low point. At the end of September, the total TV base amounted to 1.453 million. Swisscom claims that the TV market is saturated and sees the addition of more exclusive HBO content by its premium TV provider Teleclub in late 2017 as a possible remedy for its slump.

Preliminary winners: Sunrise, cable operators

While it is still early days, with just one quarter of MySports and Sky Sport in the Swiss TV market, the preliminary conclusion seems to be that the chosen content strategy is working for the cable operators and Sunrise, while Swisscom has suffered a blow. More recently, Sky Sports has spread to the set-top boxes of other operators, and Swisscom is looking for more exclusive content, so the cable sector's gains main be short-lived. In any case, the Swiss TV market has undergone a shake-up, with sports content showing its importance for operators as a means to lowering TV customer churn.



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