HBO continues to roll into Europe

Cabler to be available to 900,000 Bulgarian homes by 2003's end

BUDAPEST — Pay TV pioneer HBO, which brought pay TV to Poland, Hungary, the Czech Republic, Slovakia, Romania and Moldova, is expanding in its newest territory — Bulgaria.

HBO Bulgaria, owned by Time Warner, Sony and Disney. under the auspices of regional parent company HBO Central Europe, launched in April.

By the end of this year, it will be available to half of Bulgaria’s 900,000 cable homes, and will have hit all urban areas by year end 2003, in a country of 2.7 million TV-owning households and a population of 8 million.

“We will have a busy year,” says Pavel Stantchev, business development director for HBO Central Europe.

HBO Bulgaria’s roster of programming and dubbed movies airs 18 hours a day on weekdays and 24 hours a day on weekends. At $6 to $12 for a basic cable subscription and $6 for the pay service, it is roughly the price of three video rentals and is within financial reach of many Bulgarian.

But price may be the least of HBO’s worries. HBO’s Bulgaria’s launch is a brave leap into one of the region’s wildest media markets.

For most of the last decade Bulgaria has been fraught by political uncertainty and rampant piracy.

In 1996 hyperinflation devastated the economy and media sector. But fiscal reforms and a crackdown on black marketeers brought legitimacy and profits to the industry.

“We saw improvements in Bulgaria,” says Stanchtev. “The Bulgarians brought inflation under control, and they cut down cable and video piracy. Also it was important for us to see a critical mass of cable homes, and the cable industry. In the last few years we saw the Bulgarian market consolidate quite rapidly.”

Ironically, Bulgaria’s lawless past may have educated and primed viewers for the pay revolution. Piracy exposed many viewers to pirated pay services like Canal Plus, says Stanchtev.

However, industry leaders don’t believe piracy has disappeared completely.

“I think HBO will have a problem with scrambling,” says Christo Dermendjiev, VP marketing of Alexandra Group, one of Bulgaria’s foremost video and theatrical distributors. “There will be pirate decoders on the market very soon.”

Although pay TV will compete head-to-head with video distribution, Dermendjiev is more afraid of the impact pay TV piracy may have on video rentals and sales.