Viasat Ukraine was founded as Vision TV, LLC in 2006. Based in Kiev, it is the first and only nationally licensed provider of satellite TV in Ukraine. Viasat Ukraine is jointly owned by the Swedish-based Modern Times Group (MTG) which operates primarily in Scandinavia and the Baltic region but also across Central and Eastern Europe, and the Strong Media Group (SMG), a leading supplier of digital satellite receivers, based in Austria. The Viasat Ukraine DTH service was launched in April 2008.

Viasat Ukraine’s premium service breaks new ground in Ukraine by offering completely new types of services for this market. Subscribers now have access to Ukrainian, Russian and international pay-TV channels in one complete pay-TV package.

Viasat Ukraine turned to NDS to provide VideoGuard® conditional access, MediaHighway® middleware as well as a Ukrainian language electronic program guide.

Viasat Ukraine’s CEO, Richard Caproni is an industry veteran. He has headed Vision TV since the platform’s inception in 2006. Ukraine’s first DTH service operates under the Viasat brand. Caproni has previous experience in pay-TV in Ukraine as the top officer in charge of creating Volia Cable, Ukraine’s largest cable operator and the country’s first digital cable TV service. He was also in charge of the launch of the first broadband Internet service in Ukraine, Volia Broadband.

For the past 10 years Caproni has led the creation of new entities in different industries in emerging markets through his work in private equity, as an adviser to both the World Bank and USAID (Agency for International Development), and as a management consultant to several Fortune 100 companies.

Caproni recently discussed with World Vision the state of Ukrainian pay-TV including the roles that Viasat Ukraine and NDS are playing in making new types of content available to consumers in this emerging market.

World Vision: Tell us about the development and growth of your platform.

Richard Caproni: Vision TV was founded in Ukraine in 2006 and is the product of initiatives from the Strong Media Group (SMG), whose subsidiary Strong International is a leading supplier and distributor of set-top boxes throughout Europe and other markets with offices in 35 countries. SMG’s affiliate, Strong Ukraine, has more than eight years’ experience as the leading local distributor of digital pay-TV receivers (both satellite and cable). The idea was to meet the need for a quality DTH service in Ukraine – a need that Strong Ukraine saw each day.

With this background SMG developed a dynamic business plan and assessed a number of potential partners before launching this platform. They chose to enter into a partnership with the Modern Times Group [MTG] which operates DTH platforms primarily in Scandinavia and the Baltics and broadcasts about 50 of their own branded channels in 24 countries, reaching 100 million people. This partnership is based on a common vision and an equally pragmatic approach to business.

SMG’s local sales and distribution experience, combined with MTG’s expertise in operating DTH platforms and providing content, resulted in the ideal partnership for the Ukrainian market.

How would you describe your relationship with Viasat?

All of MTG’s resources have been made available to us to help build our business. The venture has benefitted from the expertise of their specialists in technical fields, as well as their sales, marketing and customer service experts.

What have you gained by joining with Viasat?                

In addition to their expertise in Central and Eastern European markets, Viasat’s role as a leading content provider ensures that the platform will always be able to make the best content available. We chose to launch under the Viasat brand in order to leverage their reputation as well as their marketing materials to achieve more impact in the market more quickly.

“We are the first DTH pay-TV platform in Ukraine which means we have to build the brand’s local reputation. The Viasat brand gives us a headstart in the local market,” says Richard Caproni, CEO of Viasat Ukraine

Can you describe the pay-TV market in the Ukraine and where you fit in?

The pay-TV market in Ukraine is in its infancy. There is a small number of cable operators providing a quality product but you have hundreds of other cable operators who are offering a primitive, small, analog package with minimal customer support.

“We anticipate that the Viasat brand – which means being connected to a strong international player – will help us educate the market to understand what a quality, full service pay-TV platform is all about.”

What is the potential of your market and what does Viasat offer?

There are more than 17 million TV households in Ukraine. Our primary focus is the more than 10 million who are currently watching analog terrestrial TV. Our basic package, Viasat Family, is relatively inexpensive [about $10/month]. This gives subscribers access to about 40 channels including local channels, some Russian pay-TV channels as well as international pay-TV channels, usually with localized voice-overs. In addition, subscribers have access to the main international news channels in all the major European languages.

Viewers who want more can subscribe to Viasat Prestige for less than $30/month. This provides access to more than 70 channels in Russian and Ukrainian language, 10 movie channels as well as sports and adult programming. We have the strongest movie line-up in the market and we aim to keep it that way. 

The Viasat channels, which are well established in the market, are central to our strong content offering. In addition to the initial channels - TV1000, TV1000 Russkoe Kino, Viasat Explorer, Viasat History – we launched Viasat Sport on June 2. We plan to launch more proprietary channels in the near future.

A year ago Vision TV became the first licensed DTH satellite pay-TV provider in Ukraine. What does this mean for your business?

The market in Ukraine currently presents both an opportunity and a challenge. The opportunity in the near future is to provide an uncomplicated quality pay-TV solution to the millions of households that have never subscribed to a pay-TV service before.

“The challenge is for us to stay focused on our core market before going after niche markets.”

Is piracy a serious problem in your market?

At present the amount of piracy is minimal. What we have instead is ‘unofficial viewing.’ This includes viewers of ‘grey market’ satellite services from neighboring countries. According to some estimates, about 30 percent of the 5 million cable TV viewers in Ukraine also view content unofficially.

NDS originally provided VideoGuard conditional access, MediaHighway middleware and an EPG in Ukrainian. What made you choose NDS technology?

We had several reasons for choosing NDS: The EPG and the future technology roadmap as it can apply to our platform were just as important in making our decision as the security.  

“We chose NDS to provide conditional access because of the company’s proven track record of quality and security. Ukrainian pay-TV has a history of piracy and we feel that NDS offers the best solutions to protect our business. That made NDS the logical choice for us.”

How effective have NDS solutions been in keeping you ahead of the competition?

We believe that MediaHighway middleware and the NDS EPG will give us a strong competitive advantage to be able to launch new services more quickly. We also have the advantage of being able to piggyback on Viasat’s technology platform. For example we’re currently looking at ways to adapt Viasat solutions in Scandinavia and the Baltics for Ukraine. This applies mainly to high definition broadcasts and DVRs. The challenge, of course, is to introduce market-leading innovations quickly and cost-effectively.

What else has NDS enabled you to offer?

MPEG 4 in STBs is at the top of the list. Our strategic decision to switch from MPEG 2 to MPEG 4 was made possible because the right product was already in development at that time. This significantly reduced the cost of the STB. The Viasat STB is the first MPEG 4 SD box in Europe. This allows us to economize significantly on satellite transponder space by fitting more than double the number of channels on one transponder. The result is a dynamic channel lineup at price points in line with the Ukraine market.

What has been the effect of the ability to allow free-to-air (FTA) channels on your STBs? 

Free to air capability will help us capture a healthy portion of this market that today uses FTA receivers. This totals more than 1 million viewers overall. It also includes the sale of an estimated 100,000 receivers annually. NDS’ ability to adapt our STB solution to allow FTA channels has enabled us to improve our content offering while helping make it cost effective. FTA functionality allows us to offer over 20 Ukrainian channels plus several international news and Russian FTA channels right into our main channel line-up without bearing the uplink and satellite costs. These channels are quite popular with our viewers.

Who makes up your team? How do they find working with NDS?

Our team is dominated by local professionals for whom pay-TV is a new area of expertise. Thanks to both shareholders, Strong Media and MTG, we have been able to bring in world-class experts to share the expertise learned from other markets and bring them up to speed quickly.

For example, we have recently hired a new COO who previously worked for Viasat and our new CTO worked for Bell ExpressVu, [a leading pay-TV operator in Canada].  

Where do you see Viasat Ukraine headed in the next few years and what part do you expect NDS to play in your future?

We expect significant benefits from our early advantage as the first real DTH platform in the market. We plan to hold on to our leadership position by making sure we provide the best content to the market as well as by leveraging our partnership with NDS to stay at the forefront of technology so that we are always poised to adapt to viewers’ demands.