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Duo Media streams ahead in the Baltics

As Duo Media Networks prepares to launch its first streaming service in the Baltics, CEO Jüri Pihel talks about the changing landscape in the region’s content industry and why coproductions are the way forward.

Jüri Pihel

Go3 may currently be the leading streamer in the Baltics, but come the autumn it will be contending with a new player in the market. According to Jüri Pihel, CEO of Duo Media Networks, the company will be launching its own streaming service in September, called Duo One.

And while he insists the two services won’t be rivals, Pihel’s ambition is to hit half a million customers across the Baltics by the end of 2024 – a milestone only reached by the TV3 Group-owned Go3 at the end of 2023.

To be made available throughout the Baltics and offered in four languages – Estonian, Latvian, Lithuanian and Russian – the new service will be bundled in with services offered by existing pay TV and streaming operators.

“This means that by Christmas instead of having 5,000 customers in the Baltics we will probably have 500,000,” says Pihel, adding: “You can say [Go3] is a rival, but we don’t see it that way because for us it’s a better use of content, reaching a broader audience and making it economically viable.”

The “economically viable” part of the launch is thanks to Duo Media accessing its existing system of operators. The company has already signed content agreements with six or seven operators, including Lithuania’s Telia, with negotiations taking place with several others, according to Pihel. Once up and running, the streamer will offer viewers a mixture of on-demand and live channels, with its strongest content subsequently being shown on Duo Media’s thematic channels.

“We are buying combined rights: linear rights, with SVoD rights and some catch-up. We are giving some exclusivity on SVoD for some windows – three, six, nine months,” said Pihel. “Then we are putting the same episodes and programmes on our linear channels. We have many niche channels; we can use them differently.”

Duo Media Networks traces its roots back to 1993 and the launch of Channel 2 in Estonia, at the time the country’s first TV channel backed by private capital. This subsequently expanded with the addition of two further channels (11 and 12) before its owner Eesti Meedia consolidated all three and most of its other media assets in 2017

I Can Hear Your Voice has three times as many viewers as TV3’s Estonian Idol

Two years later Eesti Meedia was rebranded Postimees Group and in 2020 its TV and radio operations were transferred into a new company named Duo Media Networks. Also part of the group was Kids Network Television (KNTV), based in Tallin, which was headed up by Pihel and had previously acquired Sony’s pan-Baltic channels.

Estonia’s TV industry entered “turbulent times” five or six years ago, and while the public broadcaster ETV “reacted seriously and in a proper way” to the changes, the two leading commercial broadcasters Channel 2 and TV3 failed to do so – for different reasons, according to Pihel, who is also a former Viasat and ETV exec.

TV3, which is part of TV3 Group, started to produce and air “very simple trashy entertainment” while Channel 2 “read the audience wrong” and went in the opposite direction to ETV by targeting very young viewers. Both broadcasters, in effect, lost their purpose and as a result four years ago the public broadcaster found itself with a higher market share than all the country’s commercial stations put together.

It was then, says Pihel, that Channel 2’s owners realised they were on the wrong path. KNTV was invited to join the broadcaster and “we found a business solution very soon that in a simple way merged the companies. And now we have Duo Media Networks, which includes all the [previous] channels and some new ones.”

The company’s channel portfolio currently consists of both Estonian and Baltic TV channels, along with three Arabic ones serving the Middle East. The total number in fact tends to fluctuate, standing at 20 earlier this year before the closure of two. Aside from Estonia, Duo Media has some commercial (terrestrial) TV share in Latvia, while in Lithuania it is a 100% pay TV operation, and all told it produces over 30 different channel feeds.

Commenting on the streaming market in the Baltics, Pihel observes that it is “quite specific” across the region. While in Scandinavia, standalone services do very well, with operators/telcos sticking to their main role and content being independent and platform-neutral, in the Baltics “operators mean content. We have full-service providers such as Telia [in Sweden] and Elisa [in Finland] and some smaller ones [TV3 Group, with Go3]. Telia and Elisa sell both internet connections and content.”

This Will Be Our Summer, a Duo Media coproduction with Elisa

However, he adds, “it looks to me that any independent service that you can buy through Telia or Elisa is not successful. Viaplay was a complete disaster. Even Netflix…” While the latter is now growing in Estonia, “it took years, because the audience doesn’t understand why they should have another service.”

Indeed, if they already have 200 live channels with reverse EPG and catch-up plus an operator’s own SVoD or TVoD service, and in some cases bundled services such as HBO or Paramount+, this is quite understandable.

According to Pihel, Duo Media has grown considerably in the last four years and today accounts for 60% of sales in the commercial TV market in Estonia, with TV3 Group claiming the remainder. Channel 2’s audience share, meanwhile, is on average 20% lower than the public broadcaster’s.

“The most important [recent] development,” he continues, “is that we now have an environment comprising two big channels. We had historically, for 30 years, three channels, almost the same size, but now we have ETV and Channel 2. That’s the biggest change. TV3 has dropped so much on average, especially over the last year.”

Pihel also points out that aside from ETV, Channel 2 and TV3, there are around 20 thematic TV channels in Estonia that have “constant and stable viewing.” Furthermore, Duo Media operates two Russian-language channels, having initially launched four in February 2022 following the start of the war in Ukraine and subsequent ban on channels broadcast from Russia.

Pihel believes that when it comes to programming, the Estonian market is very similar to the UK’s, with the top 30 shows either locally produced or formats. At the same time, Channel 2 finds itself in a “golden age of quiz shows,” with one in particular – Paramount-owned classic Jeopardy – celebrating its 20th anniversary and constantly in the top 10 programmes on Sunday nights.

He adds that last year Channel 2 dropped UK format Dancing With The Stars and replaced it with South Korea’s I Can Hear Your Voice. This proved to be a good move as the latter competes directly with TV3’s Estonian Idol and has three times as many viewers.

In his view, “Idol is obsolete for today’s audience” because young people hoping to find fame would rather use a medium such as TikTok rather than TV. I Can Hear Your Voice, on the other hand, is an “opposite type of entertainment to Idol” and often finds itself in the top 10.

Channel 2 also launched a programme last year named Full Hour. Offering originally produced investigative journalism, it is the strongest such show on the market and in a way demonstrates Pihel’s claim that unlike four years ago the broadcaster now produces “meaningful television” across several genres.

The old Channel 2 offered “very simple television” and was generally aimed at viewers living outside the capital. “Now we can’t do that anymore. You have to grow, you have to be broader,” he maintains.

Commenting on the local market, Pihel notes that there has been “remarkable growth” in both local drama and comedy content in Estonia. However, Telia and Elisa have entered the production sector, which Pihel describes as “quite painful” for Duo Media, but rather than allowing them to work alone, which Pihel feels would harm linear TV, Duo Media has decided instead to work with them.

“We coproduce a lot, especially drama and expensive docusoap type of content”, Pihel adds. “Depending on the investment, the telcos are getting the first window on their VoD service and we are keeping linear rights. And it’s good for the both of us. It’s good for the market, because the money that has gone into fiction has doubled, or even tripled in the last two years.”

For example, last year Duo Media coproduced This Will Be Our Summer with Elisa. The reality series is adapted from The Farmer Wants a Wife reality-dating format from Scandinavia, which aired in 2007-08. Interestingly, adds Pihel, both ETV and TV3 are also coproducing with telcos.

Looking to the future, beyond the launch of Duo Media’ streaming service, Pihel doesn’t envisage any more growth for Duo Media in Estonia. However, the company is still exploring possibilities in Latvia, where it already works with Telia and recently met with the Ministry of Culture.

Meanwhile in the Middle East, the company launched two new kids channels in January this year in partnership with MENA pay TV platform OSN, and is “really positive that we can sell them to more operators.”

Ultimately, Pihel says Duo Media can produce channels in a very efficient way and is “looking to combine linear and non-linear.” Its aim is to “keep linear running” and the strength of such services in Estonia is that in the last 10 years its viewing hasn’t dropped by more than one per cent.