The Polish TV market is reorganising its advertising sales operations. Universal Network (UNI) and Disney are changing ad sales partners from Atmedia to Polsat Media and TVN Media, the ad sales houses of the two largest commercial broadcasters in Poland - Cyfrowy Polsat and TVN Group.
UNI will let the sales house of broadcaster Polsat handle its ad sales as of January 2014. Cyfrowy Polsat is the only satellite platform provider offering UNI channels in Poland, offering clear synergies.
Disney has already moved ad sales operations this October 2013 into the hands of Polsat's main competitor, free-to-air group TVN.
In addition to all channels owned by Cyfrowy Polsat, Polsat Media sells advertising also for thematic channels owned by Viasat and BBC Worldwide amongst others. TVN Media's portfolio consists of all channels owned by TVN Group as well as thematic channels owned by Viacom and Canal+ and also recently added channels of The Walt Disney Company. An independent ad sales house, Atmedia does not have TV channels of its own, but acts as a third party that aggregates advertising inventory for predominantly international TV groups. Atmedia belongs to Liberty Global and is Poland's leading thematic channel advertising sales agency. Since its launch in 1998, the agency enlarged its portfolio by means of expansion into new media and territories. Atmedia is now present also in the Czech Republic and Hungary, selling advertising on thematic channels as well as websites and VoD services.
The recent changes on the Polish thematic TV advertising landscape happened as a result of two factors: the completion of the analogue switch-off in Poland in July 2013 and the second consecutive year of TV net advertising revenues (NAR) declines in Poland (see also: 'Polish TV advertising market struggles, but multichannel is pacing ahead').
The switch to digital TV has helped multichannel TV advertising to surge in Poland. Extended reach of thematic channels led to higher audiences and hence also increased attractiveness to advertisers. IHS estimates that the Polish multichannel TV will increase three per cent for the full year 2013, extending its share of total TV NAR to 25.5 per cent from 23.1 per cent in 2012 and 18.6 per cent in 2011. In comparison, we estimate that in 2013 the national TV NAR will decline 9.4 per cent, resulting in the total TV ad market's contraction of 6.5 per cent. Looking long-term, IHS estimates the compound annual growth rate (CAGR) of 5 per cent for multichannel TV NAR and 1.2 per cent for national TV NAR in 2012-2017.
However, the ongoing advertising crisis in the Polish TV landscape has limited the room for further multichannel TV NAR growth. In light of tight budgets, advertisers look for broad audience reach first, and niche audiences second. The main commercial broadcasting groups, TVN Group and Cyfrowy Polsat are best geared to deliver on both reach and niche together by bundling advertising sales of their thematic channels with their strong flagship channels. Smaller players in the market without strong incumbent channels are seeking to benefit from the same combination.
IHS sees the migration away from Atmedia as a temporary move by smaller channel groups to improve their position in a weak market. Once advertisers focus again on niche audiences, these groups may be better off in an ad sales portfolio exclusively composed of thematic channels as offered by Atmedia.