New Delivery Platforms Could Help Home2US Reach Subscriber Target

Monday, August 28, 2006

Home2US Communications, which launched a pay-TV platform via satellite in North America that caters to a variety of ethnic markets, hopes to eventually get somewhere between 1 and 2 million subscribers for its service. The operator currently has around 150,000 subscribers, nearly 55 percent of whom receive the company's premium package.

With a target market of more than 35 million, there is still plenty of the ethnic TV market for Home2US to target, Emrah Ozkan, CEO of Home2US Communications, told Satellite News. "Over the next five years, from the launch of the business in 2003, our goal was to gain 600,000 to 700,000 subscribers in the first five years. I think in terms of partnering with broadcast partners, adding numbers of channels, we have been hitting our targets since the launch and we have been hitting our targets in terms of subscriber numbers as well. Now looking beyond that, what should be our share of that overall market?

"It would not be unreasonable to say that given another two to three years, we could have 1 million subscribers on the platform. We could have 1 million subscribers, given the market size of 37 million people that constantly keeps growing based on immigration trends."

However, if the operator was to gain distribution on IPTV and cable platforms, that figure could increase even more. "If we were to add cable and IPTV, you could make a business case with [an] extra 15 to 20 channels every year, as well as more English-language programming," Ozkan said. "We could be looking at a figure between 1 and 2 million subscribers."

While the operator is expecting to increase the numbers taking its satellite pay-TV service, as well as the number of channels on the service, Ozkan admits Home2US is looking at doing more than just offering the service via satellite. "We are thinking about doing things in the MPEG-4 domain and trying to think about putting together a service which combines DVB-S and IPTV, " he said. " One of things that we actually hear from the market as well as our customers is 'Can we get some of the other mainstream programming from you?' We have been doing some research here in the last 12 to 18 months; given the market today and where it is heading, if we see [an] opening, we might look at it. We are actually thinking about having approximately 150 channels on the MPEG-4 side, and then combining it with a DVB-S model."

IPTV Launch

Ozkan admits the operator already is working on such trials as it gears up to potentially launching something as early as next year. "It would also give us another opening in certain markets where our customers have difficulties in installing dishes to receive our programming," he said. "We would be able to feed them with the programming they really want to have from Home2US via IPTV. We have been doing internal tests on the MPEG-4 side, and hopefully we will be able to roll out this in 2007."

The expansion always has been part of the company's plans. "If we are able to add more content to it and provide more than we originally thought, we could use IPTV," he said. "There is no significant deviation, however there is expansion of an existing thought."

One of the questions facing the operator is whether it wants to partner with other pay-TV operators about offering its ethnic bouquet of programming. "We are not talking to DirecTV or the Dish Network, but the cable companies will be hearing from us, as well as other platforms in North America," he said. "You can look at IPTV platform designed for the triple play based on such as SES Americom's IP Prime. So some of these will be getting content from us. With respect to the cable companies, more capacities are now available on digital networks, thus more content [is] needed on their networks. We think that content that we have on the platform in the rest of 2006 will be very attractive to cable companies as well as others to distribute to their subscribers. We think there will be more opportunities for discussions/negotiations."


Home2US also IS looking at delivering its services via mobile platforms, Ozkan said. "We are looking at these and seeing if any of the content makes sense for the next three years so we can constantly find ways of generating additional revenues as well as additional customers [who] may be the types of customers who are not interested in receiving our programming from either satellite or cable or possibly even in IP. I think mobile technologies, at least for the next 5 to 10 years, could be one of the significant growth parts of the business."

While distribution over IP and mobile are exciting prospects, however, Ozkan takes a pragmatic approach about how the operator is looking to grow the business. "We want to sustain ourselves for the long term rather than be a business that grows too fast too quickly," he said. "We will be fine-tuning some of our technical capabilities. We will add more channels and we will keep a close watch on the market and see how IPTV unfolds. It is still in its infancy. There are still problems with the technology. IPTV is still new. We will look to see how soon we can integrate some of the mobile and IPTV technologies into our business and, I think, also [make] sure that we remain a profitable company, and keep our conservative approach, and [concentrate] on our core business."


The other major area the operator will be looking at is boosting its content line-up. The number of channels is expected to significantly increase over the next year.

"By this time next year we hope to have 60 to 70 channels," Ozkan said. "We started with three channels on our first day; I think we have somewhere between 30 and 40 channels today."

In terms of which geographic areas, the operator is looking to boost its content line-up in Eastern Europe, Ozkan said. "We are currently doing very well in acquiring channels from the former Eastern [Bloc] countries," he said. "Some of the recent editions have been from Croatia and Bulgaria. We will be getting a few more channels to create a bouquet of Bulgarian channels to create a bouquet of channels. We think we have pretty well covered the Croatian market. We are looking at the Hungarian market. We have the Czech, Slovenian and the Slovak markets, which are not represented in the U.S. These are significant markets. We are also looking at bringing some content from Russia. We are talking to two major private Russian broadcasters. We want to bring five to six channels from there."

--Mark Holmes, SatelliteNews