ANGA COM panelists mull end of collective TV contracts

The impact of the end of collective cable TV contracts between operators and housing associations in Germany will likely have a limited impact initially on cable’s share of the market, but change will happen over time, according to a panel dedicated to the topic at the ANGA COM event in Cologne.

The practice of charging all tenants of a housing association collectively for shared cable connections, known as Nebenkostenprivileg, must end by June 30 next year at the latest. After that, tenants will be free to choose their own TV providers (or no TV provider) as they see fit.

Notable by their absence on the panel were the biggest likely loser from the change (Vodafone) and one of the biggest potential winners (Deutsche Telekom).

The cable industry was represented by Stephan Kalleder, senior director, products and growth at Tele Columbus, who said he believed that “most people will stick witih cable”after the deadline.

“We believe people will stick around with us. We see a high percentage doing that in the early stages,” he said, with the caveat that “people like to procrastinate” before taking a decision.

Kalleder said that 40-50% of tenants are already not subject to collective contracts with his company.

He said that operators such as Tele Columbus will not (perhaps unsurprisingly) be sending out mailers saying that collective contract levies are no longer obligatory, because if they did, tenants would become confused and ask their associations what was happening.

He said however that Tele Columbus was coordinating communications around the end of collective contracts with housing associations.

Retained subscribers will need to sign up to individual contracts with separate billing. “If you stay with cable you will have to sign a contract with us or Vodafone or whoever,” said Kalleder.

Tele Columbus will focus on signing up individual TV subscribers to start with rather than market everyone with a multi-play offer of broadband, TV and phone, he said.

Tele Columbus itself is introducing a new TV service this year with catch up and other advanced functionalities, which it hopes will help retain housing association market customers.

“We are losing 5,00-6,000 customers a month but this is not a surprise as we don’t have a proper product yet,” he said.

Kalleder said older consumers would probably want to continue to buy traditional DVB-C products while younger tenant smight prefer a more advanced service for more money. He said that younger consumers would likely look at multiple options and would choose based on value rather than small variations in price.

He added that Tele Columbus’ offer of triple-play was more than competitive with Deutsche Telekom, which also has an out of date TV offering.

Nebenkostenprivileg and OTT players

Also present on the panel were two OTT players – Zattoo and Exaring (waipu.tv).

Niklas Brambring, CEO of Zattoo, agreed with Kalleder that there was little sensitivity about small differences in prices.

Brambring said he expected about a third of customers on collective contracts to shift away from their current provider, but that this number would rise over time.

He said he expected Deutsche Telekom would bring its strong marketing efforts to bear on the segment to increase its share.

On advanced functionality, Brambring said that lessons from Zattoo’s home market of Switzerland showed that people quickly became accustomed to new and non-linear ways of consuming content, despite pressure to maintain the status quo ante from broadcasters.

He said it would be beneficial for players in the TV space to get together to highlight the benefits of aggregation through TV, rather than see consumers turn to individual app and content providers.

Christoph Bellmer, founder and CEO of Exaring/waipu.tv, Bellmer also agree that “quite a lot” of customers will stick with existing cable TV providers initially. “There are quite a lot of people who won’t do anything. In the long run people will go to the [TV on the] internet, and I can’t say about satellite, which is a different type of reception,” he said.

Bellmer said that people would increasingly become used to functionalities such as catch-up TV, and that four years from now he expected there would only be OTT players and Telekom with its subsidized and bundled offering competing in the market.

He said his company would be able to gain additional market share.

“We will make sure everyone knows there is something new on the horizon,” he said.

Christoph Mühleib, VP of sales and marketing, DACH at SES Deutschland, also on the panel, said he expected the change in the law to give a boost to free TV – in his case delvivered by satellite.

Mühleib said that SES had tested fibre and satellite technology working together in a hybrid solution that worked well.

SES sees an opportunity to target the housing association market with its HD+ offering.

Mühleib said the change meant that “the consumer will prevail” because they will have freedom of choice for the first time.

Marco Hellberg, managing director of Canal+-owned channels-for-cable provider M7 Deutschland, said that when customers can make comparisons between providers, the latter will have to consider delivering additional functionalities. He said that an HbbTV-based hybrid system could give tenants what they want.

Hellberg said there he expected there would be migration to OTT providers like Waipu.tv as well as to Deutsche Telekom’s Magenta TV offering.