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Lots more TV coming, for a price
And with it more consolidation
Netflix is considering its next round of European market entries, reported europapress.es (July 31), possibly adding Spain and others not revealed by the end of 2015. In September the subscription video on demand service (SVoD) will enter several French and German-speaking countries. The Spanish market has been noted for a high piracy rate and low interest in pay-TV. Streaming media service Wuaki.tv, owned by Japanese e-commerce giant Rakuten, entered the Spanish market in 2010 and now has over a million subscribers.
Pay-TV subscriptions in Spain continue to slide, reported the National Observatory for Telecommunications and the Information Society (ONTSI). From the first quarter 2011 to fourth quarter 2013 pay-TV penetration dropped from 24.2% to 21.2%. Pay-TV revenue dropped 7.8% year on year to €270 million. The average monthly pay-TV subscription in Spain is €29.5. (See more about media in Spain here) Netflix appears to be targeting monthly subscription rates less than €10.
The key battleground for television broadcasters, at least from the investor’s perspective, is consumer spending for entertainment. In markets seeing a bit of economic sunlight after several years of gloom pay-TV providers would like to appeal to pent up demand for top-flight sports, movies and international serials. Consolidation among pay-TV providers – including the BSkyB acquisition of Sky Italia and Sky Deutschland as well as Liberty Global buying Virgin Media – will certainly continue. Earlier this month Italian media house Mediaset sold its 22% stake in Spanish pay-TV operator Digital Plus to telecom Telefonica, which in June acquired controlling interest in Digital Plus from broadcaster media house Prisa for €750 million.
Big broadcaster shops regulators
Business consideration
Distribution licenses held in the Czech Republic by Viacom International Media Networks (VIMN) have been shifted to the Netherlands in recent weeks. It’s the “next step in restructuring,” said a company spokesperson in Poland, quoted by wirtualnemedia.pl (July 29). VIMN let the Czech license for Viacom Blink expire at the end of June and licensed it and MTV channels through the Dutch regulator CvdM (Commissariaat voor de Media).
The license for Viacom Blink through Czech regulator RRTV (Council for Radio and Television Broadcasting) required Czech language programming and limits to reality shows. The channel targets women 18 to 49 years in central and eastern European countries and is a joint venture between Viacom and Endemol. Prior to 2010 the license was granted from UK regulator OFCOM as Viacom Spike.
Ever changing digital TV rules in Italy drew criticism at a parliamentary hearing from VIMN CEO for Italy, the Middle East and Turkey Andrea Castellari for “instability…that discourages foreign investment,” quoted by primaonline.it (July 29). Italian lawmakers are revising digital TV rules for the third time in four years. “All this,” he said, “prevents foreign companies from considering our country a market where they can expand their business.”
Unprecedented criticism repeats the obvious
“democratic safeguards”
The Hungarian government has received a sharp blast of criticism over the recently enacted (and quite dodgy) tax on advertising revenues from European Commission vice president for the Digital Agenda Neelie Kroes. “A free and plural media” in Hungary “is still very much under threat,” the Commissioner wrote in a blog post (July 28). Many media watchers have blasted the government of prime minister Viktor Orban for, among other deeds, bringing the Hungarian media sector to heel.
The ad tax by all appearances is directed at the country’s most successful television channel RTL Klub. Indeed, the parliament controlled by the right-wing Fidesz party of prime minister Orban amended the law to mitigate any pain for locally owned TV2. For several years, Hungary’s lawmakers and the politically-observant regulator have effectively forced out media operators unwilling to toe the party line or pay significant gratuity to continue. (See more about media in Hungary here)
“The conclusion is obvious,” wrote Commissioner Kroes. “RTL is one of the few channels in Hungary not simply promoting a pro-Fidesz line; it is hard to see that the goal is anything other than to drive them out of Hungary. The Hungarian Government does not want a neutral, foreign-owned broadcaster in Hungary; it is using an unfair tax to wipe out democratic safeguards, and see off a perceived challenge to its power.”
“The fact is,” Commissioner Kroes continued, “government control, monopoly and censorship belong to a different, darker, period in Hungary's history: and no one should seek a return to it.” RTL Klub is owned and operated by RTL Group, principally owned by the German media house Bertelsmann. RTL executives have vowed to fight Hungary’s ad tax and everything that goes with it.
Commissioner Kroes’ statement is unprecedented; the European Commission has no media freedom mandate. That’s the domain of the Council of Europe, which has complained about PM Orban for several years. Asked about Commissioner Kroes’ statement at a scheduled press conference, Commission spokesperson Ryan Heath offered, quoted by inforadio.hu (July 28) that “she wanted to point out a pattern of behavior in Hungary.” The Commission, he said, is not “trying to change or extend it powers.”
Diversity and age in the digital transition
Change and no change
Several national regulators have set deadlines this decade, usually quite fuzzy, for a transition to digital platforms for radio broadcasting. In Denmark the FM platform is scheduled for obsolescence in 2019 if half of all measured listening is attributed to digital platforms by mid-2018. Four years is, indeed, an eternity in the technology realm but listeners in Denmark seem quite resistant to change.
A longitudinal study by the Danish Agency for Culture looking at media usage broadly shows digital radio development “still relatively slow.” To be sure, the percentage of listening to national stations via the FM platform has dropped; 64.1% in 2013 from 71.7% in 2009. And listening via the DAB digital platform has doubled in the same time period; 11.1% in 2013 from 5.5% in 2009. Online radio listening has also increased; to 4.3% in 2013 from 1.6% in 2009. A time-series graph, respectable in theory, would suggest FM platform listening in Denmark remaining above that 50% threshold for another decade. (See more about digital radio here)
But time spent listening to radio in Denmark is collapsing, from average minutes per day in 2008 to 117 minutes in 2013. Young people 12 to 18 years old were listening an average of 54 minutes per day in 2013 while folks over 70 years were listening 154 minutes per day. While portability has long been a competitive advantage for radio broadcasters, the study suggest, this may no longer be the case with all media now available on mobile platforms. “The advantage lies mainly in the increased number of channels available on platforms more diverse than FM.” (See more about media in Denmark here)
Between the national commercial channels and those of public broadcaster DR the listening share is largely unchanged over the last five years, on average 25% (and falling) for commercial broadcasters and 75% for DR channels. Listening to DR channels is strongly correlated with age; 59% of those young people listened to DR channels in 2013 while 96% of the over 70-set tuned in.
Big story – no holiday
Taking it seriously
Norway’s state security office, PST, issued a warning last week of possible terrorist activity in the coming days. The warning’s tone was sufficient for the country’s news media to add coverage. Some needed to call reporters back from their holidays.
The warning was sounded at a press conference (July 24). Public broadcaster NRK carried the first five minutes live then returned to regularly scheduled programming. “Some reporters specializing in law enforcement and jihadism have been brought back," said news director Per Arne Kalbakk, quoted by journalisten.no (July 24). “When the PST and the Ministry of Justice comes out with this and creates unrest among the people, it suggests that there is a threat they are taking seriously. We need to do the same.” Commercial TV channel TV2 also called reporters back from their holidays. (See more about television news here)
Online TV channel VGTV seized the moment, calling in staff and channeling full attention to the single story. “It is the most important story for us right now,” said news director Marius Tetlie. “We’re betting on getting more background and at the same time keeping to the facts and not raising fears among the people.”
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