Annual and Sustainability Report 2011 - Teracom

Kimi »The Iceman« Räikkönen
is back in Formula 1 and is
broadcast exclusively on MTV3
MAX and PlusTV
TV viewing in Finland is strongly related to
sports and sporting events, especially sports
that involve wheels. This type of content and,
of course, the rights to it, are crucial for the
number of subscribers and viewers. PlusTV
has exclusive rights in the terrestrial network
for the channel that will broadcast Formula 1
with the very popular Formula 1 driver: Kimi
»The Iceman« Räikkönen, who signed a two
year contract with Renault.
Finnish market
The Group acquired a majority shareholding in PlusTV in 2009 when the company
was three years old and had worked up a sizable customer base. However, the
customer base has declined since then because the aim was to have a stable stock
of long-term loyal customers, rather than to have many customers at any cost.
Churn is significantly lower today than it was three years ago and it is also on
the decline. The Finnish market differs from the other Nordic markets because the
major broadcasters have traditionally focused on advertising-supported Free to
Air television and to a lesser degree on developed channels for Pay-TV. The large
number of free TV channels poses challenges because viewers are not accustomed
to subscribing for Pay-TV to be able to see their regular TV channels. People are
willing to pay for exclusive sports rights, but that is an expensive way to get
customers.
Packaging
The Group is working intensively with the broadcasters to find opportunities
to transfer interesting content to Pay-TV in a way that commercially benefits
both parties. For the broadcasters, Pay-TV provides a relatively secure source of
financing, unlike advertising, which is highly cyclical. At the beginning of the year,
the Verraton package was launched with five new Pay-TV channels, including a
sports channel that left the free TV domain. Intensive collaboration with Canal+
during the spring culminated in the launch of the fantasy series Game of Thrones.
As a result, Canal+ sales increased by 150 percent in April and 75 percent in May.
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