Market Insight

New satellite platform nc plus targets high end of market

March 22, 2013

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Poland's new satellite TV platform, nc plus, a result of the merger between Canal Plus-owned Cyfra Plus and TVN's n, has launched with an offer of 50 HD channels, video-on-demand (VoD) and multiscreen services.

The platform's offer consists of six TV channel packages with prices starting from PLN39 (€9.50) a month for a basic package of 70 channels (including 17 HD). Extended basic consists of 108 channels (34 HD) costing PLN59 (€14). On top of extended basic, the Canal Plus channels are offered in three premium packages: 'Silver' with two Family HD channels for PLN20; Gold with the addition of two Film HD channels for PLN40; Platinum package adds the flagship Canal Plus channel and Sport HD for PLN60. The full offer, branded as All Inclusive, has an extended premium offer (HBO, Cinemax, Filmbox, adult channels), and costs PLN199 for a total of 130 pay TV channels including 50 HD.

VoD services are available with all packages from Gold and above. The All Inclusive package has five VoD services (including PictureBox and Canal plus VoD), nine internet VoD services, and multiscreen service nc+GO.

The new platform holds broadcasting rights for Polish Premier League football, the Champions League and Europa League, as well as English, French, Italian and Spanish premier football leagues. Studio deals include Paramount, Dreamworks and MGM as well as local distributor Monolith.

The agreement n had with country's incumbent, Orange (former TP SA) will continue. Subscribers to nc plus will be offered fixed internet from Orange and n's packages offered as third party by Orange on its satellite and IPTV platforms will be replaced with nc plus packages.

Telewizja Na Karte (TNK), a prepaid satellite TV platform from TVN, will continue operations. The new platform is also planning to launch a pre-paid offer.

Several channels have been dropped by the new platform: n's premium movie and sport channels, Turner Broadcasting's TCM and Cartoon Network, CBS and Universal channels and the Travel Channel.

Subscribers to Cyfra Plus and n have one and half years to migrate to the new platform.

At the end of 2011, Canal Plus made an agreement with ITI Holdings to acquire a 40 per cent stake in ITI's n-Vision controlling TVN Group, the owner of the n and Telewizja Na Karte platforms. Canal Plus holds 51 per cent of shares in the new platform, TVN holds 32 per cent and Liberty Global International the remaining 17 per cent. The transaction was finalised in November 2012. Canal Plus has the option to buy another nine per cent of shares in n-Vision in the next two years, and the remaining shares after three to four years.

The channel line-up unveiled by nc Plus indicates a greater focus on the high end segment of the market than was expected.

The premium offer is quite rich, but it is impossible to order any non-Canal Plus premium channel except with the full offer. Subscribers to both Cyfra Plus and n had the option of order some premium channels, such as HBO, on a standalone basis. Moreover, the packaging makes it impossible to choose any Canal Plus channels one would like to watch. Package Gold, formed by two Canal Plus film channels, can be ordered only with package Silver, consisting of two Canal Plus family channels; and package Platinum with Canal Plus Sport channel can be ordered only package Gold.

There are no thematic packages, as was the case with n. Interestingly the extended basic package is very similar to the Family package from mid-end focused Cyfrowy Polsat, which is the only competitor to nc plus on satellite TV: there are more or less the same number of channels (about 70) and the price is nearly the same (Cyfrowy Polsat's Family package costs PLN39.90). As a matter of fact, in spite of its upmarket skew, nc plus will compete with Cyfrowy Polsat in the mid- market, with the additional option for subscribers to upgrade to premium channels offering sport and movies. Moreover, subscribers to the pre-paid TNK platform will also be able to upgrade to TNK HD, which on top of a basic package will also provide nc plus packages.

On the one hand the merger has simplified the situation for fans of premium content (especially sport fans, as for some time the Champions League, Europa League and Polish Premier League were carried on three separate platforms), on the other, however, with its strong sports offering the new platform has an advantage which it will surely try to monetise. The fees for premium channels on cable TV are typically considerably higher and on the satellite platform there is no alternative for those who want to watch premium content.

The combining of two platforms mainly targeting the high end may cause subscription rates to go up and the All Inclusive package from nc plus is more expensive than the full offers from its predecessors. Higher prices are likely to increase churn over the next few quarters, although, on the other hand, the subscribers to n and Cyfra who were mostly after premium packages do not have now much choice if they want to keep watching premium channels. In the long run, nc plus may therefore hope for both increased ARPUs and subscriber figures, although ultimately the economic situation in the country (so far good, in spite of recession affecting a number of European countries) may become a decisive factor, possibly forcing the platform to launch more flexible packaging.

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