Merger talks between the two digital-satellite
direct-to-home services in Poland could resume now that United Pan-Europe Communications
N.V. (UPC) has signed an agreement to acquire At Entertainment Inc., one of the
country's DTH providers.
Last year, At Entertainment was discussing the creation of
a joint digital platform with Canal Plus Polska.
"We want to add channels and offer greater value to
our clients," said Nimrod Kovacs, managing director of Eastern Europe for UPC.
"Maybe there is a way that [UPC and Canal Plus] could work together. We could resume
the merger talks or think about ways to combine and cooperate."
Kovacs added that he hadn't contacted Canal Plus yet.
Canal Plus Polska managing director Gaspard De Chavagnac
said, "There is no room for two players that want to make money in this market. It
probably would make sense to have a conversation."
Experts said the purchase was likely to put pressure on
"CYFRA+," the Canal Plus digital platform in the market.
"There isn't enough ad revenue for both,"
said Greg Paine, executive media director at McCann-Erickson Polska, Poland's largest
advertising agency. Paine added that the CYFRA+ platform doesn't show up on
audience-viewing polls.
Both companies claimed to have the lead in Poland's
DTH market. UPC said it will have 145,000 customers at the end of June, while Canal Plus
said its tally will be 150,000.
De Chavagnac noted that CYFRA+ added a children's
channel and a movie channel in April, and that it will add a travel channel this summer.
Its programming clout grew last month when Poland's
public-television broadcaster, Telewizja Polska SA (TVP), acquired a 10 percent interest
in CYFRA+. That deal could lead to TVP owning up to 40 percent of the platform. The two
companies plan to develop a news channel and a cultural channel in the next few months.
"We are negotiating with other Polish companies, as
well," a Canal Plus spokesman said. "We think it is most important for us to
deal with other Polish partners. We want to create thematic channels for the Polish
market."
UPC raised the programming stakes when it agreed to buy at
least 12.8 percent of SBS Broadcasting SA. Now, the two companies can share the costs of
developing new channels.
SBS partially owns one of Hungary's privatized
terrestrial stations, while UPC operates cable networks in Hungary, the Czech Republic,
Slovakia and Romania.
Kovacs said the purchase of At Entertainment strengthens
UPC's position in Eastern Europe and makes it an even stronger force as it prepares
to compete for telephony business when the industries are liberalized.
He also revealed that UPC plans to expand its satellite
operations throughout the region, although there is no timetable.
This was good news for local programmers. For example, HBO
Hungary managing director George Douglas said his firm has been thinking about creating
new channels on the expectation that the country would get a digital platform.
He added that it didn't make as much sense to create
new channels when cable only reached approximately one-third of Hungary's 3.7 million
households.
"At least now, when we talk about a digital platform,
we have a good idea of who will be doing it," Douglas said. "In our five-year
plans, we always expected a digital platform. Now, our plans seem much closer to becoming
a reality."
