KPN Play: a good service, but to target which market?

Tuesday 24 November 2015 | 14:19 CET | Market Commentary
KPN has launched a new TV service called KPN Play. The big question is how this will be positioned in the market, as the opportunities for the operator are significant. Even if it is a good service though, success is not assured if there's no clear addressable market. 

KPN Play (or actually: Play. van KPN as the company calls its) is an over-the-top service combining live and on-demand content in a single app. The standard price is EUR 15 per month, with a discount offered the first year. This includes HBO and a basic package of live channels with catch-up services. The app offers a number of handy features, such as a recommendations engine, as well as content exclusive to KPN.


The big question is what is the addressable market for KPN Play? TV is a saturated market and a displaced market - 'everyone' already has access and increasingly through a triple- or quad-play plan. Many subscribers also have access to TV Everywhere services, such as Horizon Go (Ziggo), iTV Online (KPN) and TV Anywhere (Vodafone). The number of potential customers without access to TV but with broadband is very small.

KPN pointed to the new way of consuming media being adopted especially by young people. The company also sees an opportunity with households not able to connect to cable and only able to use ADSL from KPN. KPN Play can work with a broadband connection of as little as 5 Mbps.


On its own, KPN Play is an attractive service: OTT, so available everywhere, at a price normally charged for HBO alone, so the 'skinny bundle' of other channels included is practically 'free'. There are a few ways to approach the market with the service, which we outline below:

  • 1P. The market is focused on selling as many services as possible to each household - 3P, 4P and KPN Compleet (combining fixed and mobile services). The 1P (broadband-only) market is severely neglected and could be served by KPN Play. This creates a type of 'hedge' against the 3P/4P market focus. Players offering broadband only will embrace Play with open arms. And that includes providers from Telfort to Vodafone, as well as the many independent small ISPs, such as Lomboxnet in Utrecht, Jonaz in Leusden and Netrebel in Houten.
  • Cable killer. As there's not much point in combining KPN Play with a cable subscription (cable always requires TV service, broadband-only is not possible), KPN can use the new service to try and win over cable customers. It's likely to be most appealing to fibre subscribers, as fibre is usually better than DSL at convincing cable customers to switch.
  • Pre-emptive strike. KPN is taking on the role of aggregator with Play, leading the market and possibly pre-empting rivals (Ziggo, Vodafone, Tele2). Compared to other OTT providers (Netflix etc.), KPN Play has the distinguishing feature of live TV.
  • Digitenne replacement. The licence for Digitenne (DTT) expires in 2017. KPN could try to migrate DTT subscribers to KPN Play.
  • Complementary to IPTV (iTV) and DTT (Digitenne). Offering a third infrastructure gives KPN a more comprehensive portfolio. All that's missing is LTE Broadcast and satellite TV.
  • Replacing iTV and Digitenne. This is a theoretical scenario for the longer term, aimed at cost savings. As broadband networks become more robust, this option may be considered.

As it stands KPN appears to be launching Play because it's a good service aimed primarily at winning over cable customers, with an option for further applications.

Further development

As is standard with an app, the company would do well to continue to develop the functionality. There is plenty of room for this:

  • HD. The current app is only SD.
  • More users. A subscription is limited to five screens, but only one at a time. This could be expanded to two simultaneous users.
  • Additional packages. In the US providers such as Dish (Sling TV) and Verizon offer a 'skinny bundle' to which customers can add other packages, such as sports or children's channels.


And finally, a couple of risks:

  • HBO is likely to have strong pulling power. A similar partnership with Netflix would not add any value for the customer (as KPN confirmed to Telecompaper), as consumers already can easily sign up for Netflix on their own. However, the same may apply if HBO decides to launch its own direct-to-consumer OTT service in the Netherlands. At that point a standard subscription combining TV and OTT is no longer needed and consumers can go straight to HBO Now, the same as Netflix.
  • Cable operators can throw the ball back and start offering broadband only. For them, this is better than losing the customer completely. In areas with only ADSL, cable definitely has the better broadband service.

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