Market Insight

Polish broadcasters confirm positive outlook for 2012 after TV ad market decline in H2 2011

March 22, 2012

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Polish broadcaster TVN Group reported six per cent year-on-year revenue growth to PLN 2,649m (€642m) for full-year 2011, resulting in an EBITDA increase of eight per cent to PLN 660m (€160). The group's main competitor in the Polish free-to-air TV landscape, Cyfrowy Polsat, ended the year with a 59 per cent increase in revenues to PLN 2,380m (€577m) and an 81 per cent EBITDA growth to PLN 735m (€180m). Revenue and EBITDA increases of Cyfrowy Polsat are mainly attributable to the consolidation of its broadcasting business, TV Polsat Group, since April 2011.

Both TVN Group and Cyfrowy Polsat operations span across free-to-air television, pay TV and online. In addition, Cyfrowy Polsat business activities include also broadband and mobile internet services.

TVN Group reported a drop in TV NAR of 0.9 per cent in 2011 to PLN 1,364m (€331m), resulting from audience losses (22.3 per cent in 2010 to 22 per cent in 2011) and a 7.1 per cent year-on-year decrease in TV NAR in Q4 2011.

TV Polsat, the free-to-air broadcasting segment of Cyfrowy Polsat, reported a 3.4 per cent year-on-year increase of TV net advertising revenues (NAR) to PLN 876m (€212m) in 2011, despite a 1.9 per cent year-on-year TV NAR drop in Q4 2011. TV Polsat's result mainly stemmed from its audience share increase of eight per cent year-on-year, up from 19.3 per cent in 2010 to 20.9 per cent in 2011.

IHS Screen Digest estimates that the Polish TV advertising market increased by 0.7 per cent year-on-year in 2011.The modest full-year increase resulted from a strong increase in TV NAR of 6.2 per cent in H1, which was offset by a soft market performance in H2, down three per cent year-on-year. Growth was driven by the relatively strong performance of thematic channels, which according to our estimates recorded a 9.7 increase in TV NAR. At the same time, we estimate that national channel TV NAR declined 1.5 per cent. Consequently, multichannel share of total TV NAR increased from 18.9 per cent in 2010 to 20.6 per cent in 2011. Key driver for the strong multichannel performance was an increase in the segment's audience share from 38.2 per cent in 2010 to 41.9 per cent in 2011.

The 2011 decline of Polish TV NAR was triggered by macroeconomic uncertainty, which in turn pulled advertising prices down and caused a deceleration of advertising spending especially from FMCG companies, the largest advertiser category in Poland. However, after the weak H2 2011, recovery is on its way. The Polish net TV advertising market was flat in Q1 2012 with the perspective of improvement as the year progresses. The economic uncertainties in Western Europe have a negative impact on the Polish economy, which in turn affects TV advertising market. However, the unstable macroeconomic situation will be offset by quadrennial drivers, most notably the European Football Championship taking place in Poland and the Ukraine in June 2012. The London Olympics will also provide a modest boost. We forecast that the Polish TV net advertising market to grow by 3.4 per cent year-on-year in 2012.


Cyfrowy Polsat TVN
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