Digiturk plans to launch a high capacity personal video recorder (PVR) in Turkey in 2007 as the direct-to-home operator bids to bring leading edge technologies to the Turkish digital television market.

"Our subscribers will be able to choose how and when they want to watch TV," Hatice Memiguven, Digiturk’s COO, told Satellite News. "This box enables our customer to create their own TV schedule, pause live TV, watch different channels in different rooms and record other events simultaneously for their TV viewing. We decided to have all these features in one box, so to avoid customers having a different box in two years. This box will enable push video services, recording facilities, as well as be HD and MPEG-4 compatible. It will all be in one box. It is not just a PVR."

The operator, which has more than 1 million subscribers, plans to aggressively push its new PVR offering, as the company targets 1.5 million subscribers, in a market of 17 million households, by the end of 2006, Memiguven said.

But Digiturk still is unsure what business model it will use when PVR services are launched, Memiguven said. "It will be launched in 2007, but it is not clearly defined yet what kind of business model we will use," she said. "In the beginning we may subsidize the box a little. It will also be available in terms of a retail model as well. There will be all different models in the market. 2007 will be a huge year for us in terms of launching VOD (video-on-demand) and HD services in Turkey. Digiturk subscribers are waiting for this new box."

Services such as push video and high-definition (HD) offerings will play a key role in Digiturk’s PVR, Memiguven said. "You can download movies on the box and then people can watch them whenever they want," she said. "You will be able to push services on the hard disk. All the DRM (digital rights management) issues will be resolved. We aim to give our customers a video shop in their house which they can use any time. It will be mainly movies, new and archived movies, but there will be news also. We will also be able to transmit some events on there as well."

The growth of HD services, while key to the PVR, will take a bit longer to take hold, Memiguven said. "We are just beginning to see HD-compatible TV sets being sold in the market place, so at the moment, Digiturk Premium HD service will be ready in the first quarter of 2007, when there will be a penetration of these TV sets," she said.

Digiturk executives will use the PVR to beef up the company’s interactive service offerings to customers. "Around 75 percent of our boxes are capable of interactivity," she said. " Unfortunately, betting is not legal here yet in Turkey. There are other interactive services such as gaming, EPG, weather reports, financial data, news, mosaics, all what you have on every platform. These services are very attractive products, which distinguish our services from other TV services in Turkey, but it is not that much of a profitable business yet."

Busy Year Planned

With aggressive product launches slated throughout the next 12 months, it is set to be a busy time for the operator. As well as new initiatives in terms of its digital TV services, Digiturk also hopes to play a role in the mobile television market in Turkey, and even Internet Protocol TV (IPTV).

Digiturk is part of the Cukurova Group, which has telecom infrastructures and owns GSM operator, Turkcell. In terms of the opportunities within mobile TV, Memiguven said, "Delivering content on mobile will be a key area for us this year. While it won’t be this year, there will be the possibility to have content distributed via DVB-H at a later point also. This year, it will be on GSM. We would like to do a mobile video MVNO here in Turkey. On the video side, we want to drive the mobile TV market. We have some rights in this area already. We already have the rights for the Super League (soccer) in Turkey in terms of mobile."

Digiturk plans to offer a single mobile package to customers initially, but hopes to segment its offering into multiple packages, Memiguven said, "The business model will be one package for subscription and then downloadable content as well, so pay-per-usage type content also," she said. "The package will be free to begin with, so people get used to using it, and then around 9 Turkish liras ($6.70) a month afterwards. We have a GSM EDGE network here in Turkey but 3G services will hit the market next year. Ultimately, you will see DVB-H, and this will carry all video content and interactivity."

The operator also wants to be a key content provider to other platforms, as the digital movement gains momentum in Turkey. "Cable is still analog and covers 20 cities out of 80," Memiguven said. "We would like to use all this delivery methods for our content, so cable also. We want to be content provider across different platforms.. In terms of IPTV, there is nothing established yet. We don’t know what the business plan is going to be. But, from our perspective, we do find it a very attractive solution/opportunity. We would be able to offer a wide range of services to the customer, especially in terms of VOD."

But there are limits to Digiturk’s expansion plans. The operator has no intention of following the model being pursued by BSkyB in the United Kingdom, which has moved into acquiring telecoms infrastructure and become a more multi-faceted pay TV operator.

"Digiturk has no intention to own these infrastructures but we do have the intentions of using them," Memiguven said. "We would like to do broadband services as well. We already have some sports content available via broadband. We would like to make movie channels available. If they are already subscribers of ours, they could then get the movies whenever they would like to. This would prepare our subscribers for VOD services."

Content challenges for 2006 will focus on bringing more local content to subscribers. Memiguven said, "We are focusing more on the local content side than the international branded channels," she said. "We have all the niche branded channels on our platform. We have around eight transponders of channels. Now, we are getting more local lifestyle, documentary, teenage, and kids channels rather than the international channels. This is where we are investing right now. We have been focusing more on local content than ever."

Convincing Consumers To Pay For Service

While Digiturk is counting down to some aggressive product launches, the key to the company’s success will be persuading customers to pay for television services. This is a still a fundamental challenge in Turkey, where many people consuming digital services illegally.

"Our biggest competitor will be free digital satellite TV for a while," Memiguven said. "More than 2.5 million households have digital [set top boxes] in their house. All the adult channels can be watched illegally, so 2.5 million people are watching free digital satellite TV. These are channels, which are encrypted, but commercially hacked and people only need a software update on their basic zapper [set top boxes] or illegal smart cards to watch them. They pay nothing for the content and watch them illegally."

Digiturk hopes that its push in local content will help convince consumers to pay for TV services, Memiguven said. "We have a number of local, free channels, which are rich in content," she said. "We need to convince people that it is worth it to pay for our content. Whatever we are doing, whether it is PVR, interactivity, everything is part of this strategy. In 2007, we are going to be having more media coverage than the previous two years."

Contact, Berna Kurekci, Digiturk, e-mail, [email protected]