VOYO WANTS TO BE PART OF THE BIG THREE. WE ARE ALREADY NUMBER TWO IN THE MARKET, SAYS DANIEL GRUNT

Nova TV has already succeeded in beating HBO Max in the number of subscribers to its video service Voyo. It is the second strongest streaming service in the Czech Republic and Slovakia.

However, Disney+ entering the local market on 14 June may shuffle the ranking. According to Daniel Grunt, Chief Digital Officer in CME, which owns the Nova Group, Disney is investing the highest amounts in content production and we cannot rule out that it will dethrone Netflix globally. To find out more, read the continuation of our interview with Daniel Grunt, which follows the first part from last week.

Most TVs already have 4K resolution, some of them even 8K. Do you adjust the picture quality on Voyo accordingly?

Not at the moment. I have tested Voyo on my 4K OLED TV and I do not need any 4K source for the picture to be excellent when…

… when your TV can upscale to 4K in real time.

Exactly. The upscaling in real time on TV will get better and better as the computing capacity of TV chips will improve. That will be sufficient for ordinary viewers but of course not for some connoisseurs who will look for every pixel with a magnifying glass. When I as a common user want to relax watching a film in Full HD resolution, TV will transfer it to 4K and the experience is very good for me. We are not planning 4K resolution now but going forward, we will certainly move the Voyo Originál products to higher image quality and we have to get ready. It will be a change for the entire production chain but we will have to do it at some point.

And what about Nova’s older shows and films and series from times when there was no HD quality?

We are focusing on having everything in Full HD if possible. One of the projects on which our people are working is the improvement of the quality of older titles. Voyo has been on the market for 11 years, it has a big library including a number of old titles in SD or HD ready resolution. So now we are changing hundreds of titles each quarter to improve quality. At some point we will find out that no higher quality is available for some titles and we will just consider whether the title is interesting enough be on offer with lower image quality.

You have said that 60 percent of users watch Voyo via TV. Is that followed by a computer or a mobile device?

Then it is in principle one-to-one for mobile and laptop with mobile and its importance increasing. Logically and practically, I am convinced that watching Voyo on TV will achieve a greater percentage in the long term, mobile will also grow and the importance of laptops will decline. I will be either at home watching on a big screen or if it is occupied by another family member I may switch on the laptop. But outside, I will use my mobile – on the way to school, to work, on vacation, on weekends…

Do you have any idea for how many users Voyo is the first streaming service? You have said that Czech viewers use 1.3 streaming services per household on average. Logically, they have to use some more and some less – and consider whether it is worth paying for the less used ones.

This is exactly the reason why I have said that for us it is extremely important that people are as active as possible in our service. For this reason, one of the metrics we monitor is the amount of time spent watching our shows per week. Because the more time I spend with a service, the more satisfied I am with it and there is no reason to cut it off. But we do not know the percentage of the use of Voyo and other services as we have no way of finding it. We do not know how viewers use other services, we do not know precise numbers of their subscribers.

Do you commission independent surveys through agencies such as Ipsos or GfK?

Of course we do. There are many surveys and they are made from various perspectives and we are trying to make a big picture of the market. But you are asking about a very detailed matter. For example, we ask on a monthly basis about competitors and how users consumer Voyo – whether daily, several times a week, once a week, several times a month, once a month or not at all. Over the past few months, Voyo has seen the highest growth of any service in daily and weekly usage.

To what degree is linear content important within Voyo? I mean Nova Sport and sports broadcasting.

Linear content in general is an interesting complement but it is not an acquisition factor. It is not something to make people pay for Voyo but if they have Voyo they like using it in situations when they are not in front their TV sets. We can see that linear watching of these channels via Voyo is growing on weekends and during holidays. As for sports broadcasting, it is the most attractive from linear channels. Especially combat sports such as MMA, KSW, etc., attractive football matches, NHL and NBA.

Does it mean that for example Eurosport Player is not a competitor to you as it is a purely sporting matter?

Eurosport Player is a very narrow section. It is a very specific offer, a clearly defined target group, so we do not perceive it as a competitor at the moment.

Let us move to another issue, the Czechflix project that was intended to aggregate content of streaming services from all large Czech TV groups. You said at the DIGIMEDIA 2021 conference last year that negotiations with ČT and Prima were ongoing but that it would depend on the conditions for cooperation being advantageous for all parties. Have the discussions progressed somehow?

No, they have not.

And are they still going on?

Let us say that the intensity of the discussions is lower than it used to be.

If Czechflix is established, would you provide it with Nova’s TV content or the original production from Voyo?

It is a question I cannot answer because if there is no model of how the service should look like, what the main benefits for individual participants there will be it is hard to predict. All of the participants should provide their premium production for the service to make sense, which means ideally originals just like Voyo Originál, and another thing that works, i.e. previews of TV series.

How are the Voyo trailers around Televizní noviny (TV News) working out for you? Previously, Nova promoted evening shows on linear channels, now it also promotes selected films or series on Voyo. Do viewers watch what is promoted in the time when it is promoted?

Logically, TV is our strongest communication channel. What we communicate around Televizní noviny and in prime time works the most. We watch the service’s traffic, new signups and entries on Voyo home page at the time the trailers are running and we can see big peaks. It is an immediate effect showing the power of TV. Usually what I communicate most strongly on TV I have on the most premium positions on the home page of the service, so it is hard to tell whether the decisive factor was the trailer on TV or that a user came to Voyo and came across the show.

Is it worth it driving people away from linear broadcasting to Voyo and reducing the ad block rating?

We are not driving out those who want to watch linear TV because they are going to stay with the linear broadcasting. For people who are not sure and consider switching to another channel or paying for another service it is better to go to us rather than to somewhere else. That is why we are doing it. It is better to cannibalise ourselves than being cannibalised by someone else.

350 thousand users is quite a lot, it is a good chunk of money. Is Voyo in the black or are you still in the red?

We are still in the red.

And what is the outlook?

Our plan is really long-term, for five years, which does not end with a million users but with a higher number. There are relating investments, income and we are now above the plans in terms of revenues because we have significantly more subscribers than we planned for this time. Now we have more than 350 thousand users, which is a level we planned for the second half of this year. And I am talking about an adjusted plan because based on last year’s results, we have increased the plan for 2021-2025. The goals for the end of this year are substantially higher than we planned at the beginning of last year. It is still true that in 2025 we should generate profit. I think that if we continue at the same pace as so far we will be profitable.

Which means that at a million users you will be in the black.

Profit depends on the amount of investments in content and we can see now that the more we invest the more subscribers we get. As any digital business, we prefer growth to profit. But we can change it whenever we want. At present, our investments in content are huge. We are talking about billions of crowns so even if the income from Voyo is wonderful, investments in content production are even higher.

Do you think about offering multiple types of subscription? For example Netflix has several levels: the basic rate for a single device and SD resolution, then a version in HD for multiple devices, after that Premium in 4k. HBO Max has come with a reduced introductory price…

We will consider it in the future. Now I think it is too early because both we and the market are in the growing phase. It is much more important to acquire as many people as possible to subscribe to the service and any division into packages makes the message about the product more complicated. For me it is important that the message is as simple as possible in order to educate the market. Working with subscription packages will start to make sense when the market starts to slow down and we need to keep our subscribers or increase income.

Are you worried about inflation and that the prices of everything are going up and people will try to save money? And that entertainment will be the first thing to cut off? It is dispensable.

We will see what will happen. Practically speaking, CZK 159 per month – how many packs of cigarettes is that?

Not everyone smokes.

When I go to the pub with my friends, how many pints will I have for this amount? When I go to the cinema, for CZK 159 I would have to go there alone to watch just one film so if I take my family with me and go to the cinema to watch a single film, I will pay a multiple of what I will pay for Voyo’s library with 17 thousand hours of content and all my family can watch. So there is no problem there in my point of view. But we may need to introduce such comparative communication at some point. But I think that people would stop going to the cinema rather than unsubscribe from Voyo or Netflix.

Every time I go to the newsagent’s, subscription cards for Netflix or Voyo catch my eye. How does this method of subscription work? Is it selling well?

We introduced it during the last year in the autumn season. It was based on a simple consideration that there was still a segment of people, especially older ones, who were not used to paying online. It related much to Ordinace. We offered this subscription method to these people but it is really a minority issue. When I look at the methods of payments for Voyo, 99 percent of people use recurrent payments when the amount is deducted from their credit card.

But the subscription cards make you visible at the newsagent’s.

Exactly. It is visible and we are giving a chance to people who might be discouraged by the online payment using a credit card.

Or it may be an option to give Voyo as a gift.

Yes, this worked very well at Christmas. We sold a large number of annual packages. The Voyo brand got under people’s skin. By the way, this is one of the things that Nova managed to achieve: increase brand awareness. When you look at the market today, we are the largest together with Netflix. When you ask about a streaming service, Netflix is the first what comes to people’s mind. Voyo is second. Then there is a long pause followed by other services with single-digit shares.

We were discussing it in detail at the DIGIMEDIA conference several years ago. At that time you said that you had a large group of people tracking where Voyo’s original content appeared so that you could report it and have it blocked.

We have a team of people who are engaged in it and we are paying about three external agencies that are searching the content for us, reporting it and we then solve it. After the launch of Voyo Origiál there has been an increase and it costs us a lot of money to manage the surveillance. Yes, we are still reporting pirate copies to entities such as Uložto and they are responding with delay, often within days. And when they delete the content it reappears. If we had less activities against pirates I think that Voyo could not work well. Piracy would kill it.

Nova has the same owner as the largest IPTV service in our country, O2 TV. Are you planning any synergies? O2 TV has purchased a lot of interesting sports rights…

Yes, it is true. At the same time, Nova is selling many rights to O2 TV, in principle most of the best football leagues in Europe that run on O2 are bought from Nova. That is why we are talking about it. It is not specific to O2 TV. When we look at all advanced countries, major streaming services cooperate with all operators and large content suppliers of a particular country. So it is quite probable that Voyo will be available via these operators along with the standard offer of linear channels of all pay TV stations, along with Netflix, HBO Max and Disney+. It is a trend, it is where the market is going and we can see it everywhere.

I do not know whether O2 TV still has a video library…

Yes, it has.

Does not it make sense to replace it with Voyo if you have the same owner?

It will make sense if we manage to create an interesting concept to be proposed to users because Voyo has some value. Premium content has some value that is large and it will always be reflected in the price of the package. Be it O2 or other potential partners in future, Voyo must always have its value. With Voyo, we will never go below the cost for which it is available to users separately in the market, for which they can buy it directly. As I said a while ago, in the stage of growth we definitely do not want to provide any substantial price reductions to pander because we would reduce the perceived value of Voyo. And if Voyo has increased so much over the last year it is because people started perceiving its value.

What streaming services are you watching at home and how much time do you spend with them?

If we are talking just about streaming services, I have Voyo, Netflix, HBO Max, Amazon Prime, Europsport Player and in addition I also subscribe to Spotify for the entire family and Xbox Gold for children. And I may be paying for something else that I no longer remember.

Do you manage to watch them?

I make a selection. I am the kind of person who sits down in front of the TV at night and goes through his ritual. I am going through all of the services I am paying for unless I am watching a series. I have come to a stage when I do not watch films at home at all. I switch on TV after 9 or 10 pm and it is late to watch a film. I rather watch two or three episodes of some series that are 50 minutes long and I still have a chance to stop when the episode ends.

But If I am not in the middle of watching a show, I go through all services and quite often end up watching linear TV. I switch on something that is on, I watch from the middle, it is interrupted by ads although I know that if I make four steps and put a blue-ray disk in Xbox I could have the same thing in better quality, from the beginning and with no ads. But I still keep sitting and watching linear broadcasting because all I want is peace of mind. I think that many people will do the same in future. New users who will subscribe to a streaming service will be overwhelmed by it at first, they will watch the best for several months and then they will find out that making a decision what to watch is painful. It will annoy them to search what they have not seen yet or what is new. Even the large size of the library portfolio may be limiting if you have to make a choice.

When using competitive services, do you come across something that is better than on Voyo and that could inspire you?

We get inspired all the time, if only because we started investing significantly more in Voyo and its development last spring. I remember that when I worked at MTG (former fifty-percent owner of Prima, ed.) they had several slogans in their DNA and one of them was “copy with pride”. And it was not meant negatively at all. The point is that often it is better to take inspiration from what works in the market and is established than inventing something nobody else has because it may mean that it does not work. But it is not that we are mindlessly copying everything we like. We think a lot about why they have it this way or that way, why they have selected a particular approach and we think about how to improve it.

How many of the big streaming services do you think can make a living on the Czech market?

The general economic theory is working with the concept of an economy of three or the “Big Three”. If there is a market that has already been developed or mature, three big services can survive in it and along with them maybe some more narrowly focused ones if they keep a sharp eye on their costs. I am convinced that in the Czech market, there can be three services that will be profitable in the long term. And we have to be one of them.

One of them or number one?

We do not need to be the first, we want to be one of the top three services. For me, it is important to have a certain number of people paying us regularly and to be one of the first services that come to people’s mind when they think about signing up to a SVOD service.

Source: televizniweb.cz

HBBTV SYMPOSIUM AND AWARDS 2022 CALLS FOR SPONSORS

The 10th HbbTV Symposium and Awards on November 9-10, 2022 in Prague, Czech Republic, will provide a unique platform to target top-level executives of the global connected TV industry with commercial and promotional activities. The HbbTV Association, which co-hosts the in-person event with the Czech Association of Commercial Television (AKTV), has compiled several attractive sponsorship packages.

“After last year’s very successful 9th HbbTV Symposium and Awards in Paris, attended by around 180 visitors, we are excited to offer the international broadcast and broadband community another great opportunity to meet, exchange the latest news and obtain first-hand insights in new products and services. Sponsors benefit from a focused target group of high-profile market players at the 10th edition of the connected TV industry’s annual key event,” said Vincent Grivet, Chair of the HbbTV Association. “I’m sure that the location in Prague, reflecting the very active and innovative HbbTV landscape in Central and Eastern Europe, will provide additional value to sponsors.”

The HbbTV Symposium and Awards 2022 will take place at the National house of Vinohrady. The prestigious neo-renaissance building, centrally located in Prague, will provide a first-class base for conference attendees, sponsors and networking.

Details on the sponsoring packages at the HbbTV Symposium and Awards 2022 and the preceding preview and demo events can be found in the Call for Sponsors. Interested companies are encouraged to secure their commercial arrangements quickly as the opportunities are limited, ensuring great visibility for the participating partners. Early bird offers with reduced rates are available until May 15, 2022.

Contact details for sponsoring
Mr. Andrea M. Michelozzi, Dime Comunicaciones, Tel: +34 (606) 516 106, email andrea@dimecomunica.com

The HbbTV Symposium and Awards 2022 targets platform operators, broadcasters, advertisers and adtechs, standards organisations and technology companies, offering first-hand insights into the latest and most innovative services available to viewers, operators and advertisers.

The HbbTV Symposium will also host the 5th edition of the HbbTV Awards, featuring a wide range of categories designed to acclaim best practice and excellence in the HbbTV community. Details on the categories and participation will be announced in due course.
About the HbbTV Association
Hybrid broadcast broadband TV (or “HbbTV”) is a global initiative developing a specification enabling the delivery of advanced and interactive TV and entertainment services to consumers through a combined use of both broadcast and broadband networks. The HbbTV specification is developed by industry leaders to improve the video experience of consumers on connected TV sets, set-top boxes and multiscreen devices. The HbbTV specification uses elements of existing specifications from other standards including OIPF, CEA, DVB, MPEG-DASH and W3C. With the incorporation of activities from the Open IPTV Forum (OIPF) in 2014 and Smart TV Alliance in 2016, HbbTV is able to address service providers and technology suppliers for IPTV services as well as the combined scope of broadcast and over-the-top (OTT) services.

HbbTV is organised as a non-profit association registered in Switzerland and has around 80 members which include all global TV manufacturers, the large European broadcasters and TV platforms as well as a vast array of global technology and chipset vendors. More information: www.hbbtv.org

Contact HbbTV Association:
Angelo Pettazzi
Chair HbbTV Marketing and Education Working Group (MEWG)
email: angelo.pettazzi@mediaset.it
Tel: +39 02 2514 8355

Press Contact:
Thomas Fuchs
Fuchs Media Consult GmbH
email: tfuchs@fuchsmc.com
Tel: +49 171 4483 168

About the Czech Association of Commercial Television
The Czech Association of Commercial Television (AKTV) was formed in 2017 as an association of terrestrial television broadcasting operators with the goal of defending, supporting and promoting the common interests of commercial broadcasters in the Czech Republic. The founding members of the Association are the Nova, Prima and Óčko television networks. More information: www.aktv.cz

Contact Czech Association of Commercial Television:
Marie Fianová
AKTV Secretary
email marie.fianova@aktv.cz
Tel: +420 724 442 935

RESEARCH: CZECHS CONSIDER MEDIA INDEPENDENCE IMPORTANT

Research in the Visegrad Four countries found that the public supports EU measures on media freedom.

The first comprehensive survey of public attitudes towards media freedom in the Czech Republic, Hungary, Poland and Slovakia shows that 52% of people are concerned about the state of media freedom in their country. 71% of respondents support stronger national legislation to protect media independence and 59% of respondents agree with greater EU powers in protecting media freedom.

The survey also shows large regional differences. While attitudes towards media freedom in the Czech Republic, Poland and Slovakia are basically comparable, in Hungary, where the ruling party controls most of the country’s media, support for editorial autonomy and independence of public service media was significantly lower, according to the survey.

Compared to the other V4 countries, the Czech Republic has the highest proportion of people who consider media independence an important value (86%), the highest proportion of those who think that media owners should not interfere with editorial autonomy (62%), but also the lowest proportion of those who express concern about the state of media freedom (47%), and the lowest proportion of those who agree with economic support of the media by the state (25%, half as many as in Poland).

Key findings:

  • Concerns about media freedom across the V4 countries. 52% of respondents expressed concern about the current state of media freedom (63% in Poland, 49% in Slovakia, 48% in Hungary and 47% in the Czech Republic).
  • Greater understanding of media independence is expressed by those who rely more on online sources for information about political events. The survey found that people who read online news content are more likely to consider the values related to media freedom important. In Hungary and Poland, frequent reading of printed newspapers is associated with less positive views of media freedom and independence.
  • Younger generations are less concerned than older people. In most of the V4 countries, young people are relatively less concerned about media freedom and independence. In Hungary, only 36% of 18-24 year olds expressed concern, compared to 61% in Poland. In Slovakia, the figure drops to 39%.
  • Media freedom has become a deeply politicised issue. When asked whether they were very concerned about media freedom, 89% of the supporters of the Hungarian Democratic Coalition answered in the affirmative, while only 10% of Fidesz supporters expressed concern. In Poland, only 34% of PiS supporters consider media freedom to be a serious problem, while 90% of opposition supporters say they are concerned about it. In the Czech Republic, supporters of ANO or the far-right SPD are again much less likely to consider the values on which media freedom is based to be important than supporters of other parties.

23% of Slovaks believe that the state of media freedom has improved over the last five years, which is the highest percentage of all V4 countries. This opinion is more common among voters of OLANO (37%) and the PS/SPOLU coalition (51%), while only 8% of SMER voters agree with this opinion. Among the V4 nations, Slovaks are the most supportive of EU sanctions against countries where governments interfere with media freedom (64%).

90% of Polish Coalicja Obywatelska voters are “concerned” about the current state of media freedom, 52% are “very concerned” (top of the scale). 34% of Prawo i Sprawedliwość voters are concerned (42% are not concerned), 7% are very concerned. 87% of Koalicja Obywatelska voters are against the government’s influence on public media news compared to only 47% of PiS voters.

When asked if they were “very concerned” about media freedom, 89% of the supporters of the Hungarian Democratic Coalition answered in the affirmative compared to only 10% of Fidesz supporters. Media freedom is “absolutely important” for only 34% of Fidesz voters, but for 89% of Democratic Coalition voters.

The survey was initiated by the Editorial Independence Council in cooperation with the Czech National Committee of the International Press Institute and with the support of Bakala Foundation. It showed how political and generational divisions and the way people consume media significantly shape attitudes towards press freedom in individual countries.

About the survey

The survey was carried out from 1 to 17 February 2022 by Median, combining online panel surveys and telephone interviews. The total size of the sample was 4,069 respondents (aged 18+). The survey was initiated by the Editorial Independence Council in cooperation with the Czech National Committee of the International Press Institute and with the support of Bakala Foundation.

Source: mediaguru.cz

CZECH TV GRP VOLUME ALMOST UNCHANGED

For the first quarter of this year, the volume of TV advertising GRPs was almost unchanged compared to the same period last year.

The total volume of TV advertising GRPs delivered during the first quarter of this year remained almost at the same level as in the comparable period last year. It was down 0.5% in the first quarter of this year, according to Nielsen Admosphere monitoring data. The result applies to both TV spots and sponsorships.

The TV market thus did not experience any significant fluctuations in the first quarter. As we have already reported, the volume of monitored TV advertising investment then increased by 9% year-on-year.

Media Club (Prima, Óčko, Barrandov and several other thematic stations) and Nova Group (Nova Group stations) continue to hold the highest shares of the number of GRPs delivered. Atmedia’s representation improved the most year-on-year.

Share of business networks in GRP deliveries, 1Q/2022

Source: mediaguru.cz / Nielsen

Source: mediaguru.cz

ADVERTISING INVESTMENTS IN MEDIA GREW IN THE FIRST QUARTER

Most media types posted double-digit increases in the first quarter, according to Nielsen Admosphere monitoring.

The volume of monitored investments in Czech media in the first three months of this year exceeded CZK 21 billion, which is 12 % up  year-on-year. The majority of media types posted double-digit increases in the first quarter, Nielsen Admosphere monitoring further shows.

Outdoor advertising (+35 %) and radio advertising (+23 %) recorded the highest increases compared to Q1 2021. However, print advertising (+15 %) and TV advertising (+9 %) also thrived.

Internet advertising is not included in the overview because the monitoring only takes into account some forms of internet advertising.

Source: Nielsen Admosphere

The data for March does not yet indicate lower advertiser activity in response to the war conflict in Ukraine. However, it is likely that the suspension of advertising activity will be reflected in next month’s data.

Source: mediaguru.cz

VOYO DOES NOT TARGET YOUNG PEOPLE. WE ARE ALL ABOUT FAMILIES, SAYS DANIEL GRUNT

Nova TV’s Voyo video service experienced an exceptionally successful year. At the beginning of 2021, it announced an ambitious plan to attract a million customers within five years. At that time, Nova only had about 60 thousand customers in the Czech Republic and Slovakia. It surpassed its annual goal in the autumn and now the number of users exceeds 350 thousand. By the way, it is more than the global player HBO Max has in the Czech Republic.

How come Voyo attracted so much attention and how does it plan to maintain the high share in the increasingly competitive market? We have asked Daniel Grunt, Chief Digital Officer of CME, which owns Nova and Voyo.

This year marks a turning point for streaming services in the Czech Market. HBO GO changed to HBO Max, in June Disney+ is coming, the merger of Discovery+ and HBO Max is drawing near, and Voyo is expanding its original production. Which of the changes do you find the most interesting for your market?

Probably the most interesting thing is the concentration of developments this year. There are relatively many launches. They will include services that you have not mentioned and that will probably be less visible because we will not be too important for Europe within their strategy. So definitely, the most interesting thing is that the market, which started growing relatively remarkably two years ago, is getting extremely dense. But what is positive is that we are at the beginning of the growth wave and the market may up to double by 2025 or 2026. So there is much to select from.

I take the onset of competitive services positively as they promote the existence of streaming services in general. It will help significantly to educate the market and it may also accelerate penetration of households with the services. I expect the penetration to range between 24 and 26 percent in Czech households this year. That would be five percentage points more than last year. And I definitely think that this year will make households that have some experience with a streaming service subscribe to other services and as a result, they will pay for multiple services.

How many services does an average Czech household use?

We have originally expected that this year it will be 1.3 services per household on average but I think that it may easily be more. When I compare it with markets that are about four years ahead of us, such as the UK or Scandinavian countries, they have 2.5-3 services per household. And they are expected to grow to four. In the US, which has a specific market, it is more than four services per household. I estimate the number to be 2.5-3 services per household in 2025, both in the Czech Republic and Slovakia. Much of this will relate to the growth in household penetration of receivers capable of using these services. But it will be quite an interesting area for growth both for us and for global players.

But the number of streaming services that households will be able to afford will depend on the price.

That is true but the price is quite reasonable in my opinion. All prices range between 150 and 200 crowns. It is the basic input price that I find acceptable for Czech and Slovak households. Our target is that penetration of households with VOD services may be over 40% in 2025.

The price is one thing but the time users can devote to streaming services is another. If you have three services plus linear broadcasting, you can hardly watch all of them. In addition, with Voyo you  cannibalise the time viewers can watch Nova and its thematic channels.

Time will be the most precious commodity we will compete for. It is interesting that if I look at video consumption for the last five years, the accumulated time devoted to this activity has been growing strongly all the time. It is not that people replace one way of video consumption with another. At least in our region we can see that linear TV has still be growing a bit but there is a simultaneous rather aggressive onset of another way of consumption, be it AVOD (free online archives), SVOD (pay streaming services) or short videos. It is more about people cutting off their free active time in favour of this more passive entertainment.

Was it caused by Covid-19 when there was nothing much to do? Can it change now?

No doubt Covid has initiated it but in general, the video consumption growth started far before the pandemic. Covid has accelerated the shift as people were not able to meet so much, they were staying at home more. When you look at the figures for linear TV in the post-Covid era, they are not falling, they are still very much up, and that does not apply just to older viewers but also to younger people who spend around an hour and a half a day in front of the TV. I think that this is enough, it is still the strongest source of video entertainment for them. Of course, we will compete for people’s attention and time with casual gaming and other entertainment activities. The most precious commodity will truly be viewers’ free time that we will compete for.

What will it mean to linear TV?

We enhanced Voyo to expand our portfolio of potential entertainment for viewers. In Western Europe we can see that the number of people not watching linear TV slightly declines to the benefit of non-linear services and we need to occupy this market sector in order to compensate the falling interest in linear TV on the streaming side when it occurs. By doing so, we are opening a new way of our work monetisation. We collect money directly from customers and the sum should be even more interesting in future. There will always be a combination of linear and non-linear broadcasting but what matters is the proportion. For us it is extremely important that viewers spend maximum time within our portfolio of services. Voyo becomes the first gateway in the video distribution chain we have. This means that the most recent and premium things go to Voyo first and we are not planning to include them in linear broadcasting yet.

Does this mean that the series Ordinace v růžnové zahradě will not come back to linear TV screens?

We are not planning that, Ordinace has been produced exclusively for Voyo and the plan is long-term.

Not even in two years?

We do not plan on it.

And what about Voyo Originál programmes, such as the miniseries Roubal, Guru

That is possible. Maybe in two years. But Ordinace has been produced just for Voyo so far.

Nova’s core business is linear broadcasting now. Do you assume that this will change at some point in the future and non-linear services will become the main source of income while linear broadcasting will be a supplement?

I sincerely do not believe that this will happen in the foreseeable future, by which I mean the next 10 or 15 years. It has to do with our nature. A man is a lazy creature and the need for more active video consumption will saturate to some degree over time. I can see it on my own example. After many months of using SVOD services whichever of them it is, I spend some time searching what to watch and I get tired of that. So I switch on linear TV and watch it. And it will be like that, there will always be a certain combination. Since linear TV is strong in our region I think that it will not change in the near future. But it will definitely be an interesting supplement.

Let us move to numbers. You have long not commented on the number of subscribers and suddenly 350 thousand appeared on LinkedIn in February. What is the number of subscribers now? Do you have half a million of them?

All I can tell is that we continue growing nicely and have more than 350 thousand users. We are not going to announce the numbers of our subscribers too frequently. Our competitors are not doing it either.

How come you published the number in February? Was it your common decision or did it happen by chance?

We wanted to show off. When we started making changes in Voyo at the beginning of last year, we had about 60 thousand subscribers, so the leap was huge. It was our assurance and celebration of the work of the people involved. Basically nobody outside Nova believed that we could manage that. This related to the fact that the goal we had announced, a million subscribers, was enormous. Everyone was thinking that those were further promises… And when it became clear that our people, who spend all their time working on Voyo, had such great results, we wanted to show them after the first year. But I do not think that the frequency of publishing figures will be higher than once a year. Even that is quite frequent in my opinion because our competitors do not disclose their local figures at all. For us it was important to show that we managed to achieve some results and were going in the right direction.

But you will disclose the numbers in Nova’s annual report, won’t you?

I do not think it is necessary.

How come that 300 thousand people have subscribed to Voyo within a year? Is it due to the series Ordinace v růžové zahradě that you moved from TV to the online service or does it have another reason?

It is a huge combination of thousands of small factors. To mention the most important ones, the key factor for us was the maximum focus on the fact that we take ourselves seriously and that it is a priority across the firm. We set up a path to follow and we did not hysterically move to one side or the other when things were not going well or we were not sure. And another reason is that we have increased our marketing team as much as possible. It is relatively large in all elements, ranging from acquisition marketing to the retention, PR and creative components. We have staffed the team excellently and learnt over time what works and what does not. We have introduced a data team and started investing time, energy and sources in business intelligence, data and CRM. We have moved from a situation when we were pushing the marketing investments and content to some black box, from which we had some output and we had to think hard what it was to a very detailed insight into how people behave and what they watch. We can segment them and thanks to this we can offer them better content and maintain their attention. This naturally relates to another pillar, which is content.

The most famous is probably Ordinace v růžové zahradě that moved to Voyo. This must have been a turning point in the decision-making of a number of customers whether to pay for your service.

Yes, the move of Ordinace to Voyo was very helpful last year. It is the most famous Czech series that was on screens for 15 or 16 years. During the last season on TV, each episode was watched by nearly a million viewers. As for Voyo audience, it helped us much. I think that it helped us in terms of communication and image. It was also a signal to the market that we take it seriously when we take a successful series and move it from TV to Voyo. At the same time, we increasingly invest in linear TV creation, the quality of which has grown substantially. Investments are tens of percent higher than years ago and this helps Voyo. If something works well on TV and we can provide it to people without ads and earlier than on TV, it works extremely well.

Does it work the other way round when you produce something just for Voyo? How is the Voyo Originál series doing?

At the end of last year, we launched the first Voyo Originál miniseries, Případ Roubal, which helped us enormously in terms of image. We have created something that has high quality and it was nominated for the Czech Lion (Český lev) award. It is perfect, we have attracted new faces and authors that have not worked for Nova so far. Which is by the way another great benefit of Voyo for the Nova Group because through Voyo, we are attracting creators to Nova who have not worked with us before. We meet very creative people, be it faces, directors, scriptwriters, producers or production groups.

Apart from Roubal, Love Island also worked well. When I look at the most watched titles in April, they include Voyo Originál. We also have a very good acquisition, for example Servant of the People starring Volodymyr Zelenskyy works very well. We have focused on European acquisitions, Scandinavian and British crime dramas and national versions of Wife Swap from other countries, e.g. Slovakia or Australia. I believe that the content mix is very good and as we know our viewers and communicate with them we substantially increase their activities in our service. On average, they watch Voyo 12 hours a week. And 90% of subscribers use Voyo at least once a week. Our users are thus very active, which could mean in the long term that they will stay with us for a long time.

What do they watch most?

The most watched shows naturally include Ordinace. Roubal and Guru are still working well. What is nice about this platform is that it is not just like TV where you launch something and people have to watch it in that moment and do not come back to it. As we released Roubal at the end of the last year, Guru at the beginning of this year and Házená now, we are still on top.

And what is the difference between the number of viewers of Ordinace and the miniseries mentioned? Is there a big gap?

It is nearly one to one. Really a great portion of people watch these things. Leaving aside Ordinace and other Voyo Originál production, the most successful TV shows work the best – Wife Swap, Ulice or Servant of the People. From time to time, reality shows make it into the TOP 10. Voyo Originál shows seem to be a big motivation to subscribe to Voyo.

Who is the typical Voyo viewer? Do you have any surveys?

To be honest, we want to keep the registration form as simple as possible, so we do not ask too many precise questions and we do not have detailed socio-demographic data. But we collect the data from several sources. Of course, we have quality research studies, brand tracking that we commission on a regular basis. What content people watch is what defines their socio-demographic and economic status. And then we have a clearly defined target group that we seek to reach and we tailor the way we communicate and the content we buy and produce accordingly.

The core of our target group are young families, in my point of view thirty to forty year olds, those are viewers we target. We are not focusing on very young people and will not focus on them in the long term. We will leave them to Netflix, it is no point competing with Netflix in this segment. One of the reasons is that this target group is rather instable. It fluctuates depending on where the relevant content appears. We tend to go for people who are more stable, more loyal and there are more of them. If we were to expand our target group, we would go for older than thirty and forty year olds. There is a huge potential, the greatest in fact.

Children’s content also works very well, which relates to our focus on young families. We have invested relatively large amounts in the acquisition of children’s content and we take pride in the fact that it is completely dubbed into Czech. As such, there is a clear pre-selection. Parents do not have to worry that something inappropriate will pop up when their child is watching Voyo. Which cannot be ruled out on YouTube or other platforms. Another thing is that children understand the shows because they are in Czech.

Do you have any original shows for children?

If I think about our production plan until the end of 2024, I do not recall anything focused especially on children. We focus more on families.

When talking about children, how much will the arrival of Disney+ shake up the market?

We will see, it is hard to predict. Disney+ is definitely a strong service. Globally, it is number two after Netflix.

Do you offer anything from The Walt Disney Company?

I do not think so. It might not be possible as big TV groups, especially the US ones, started withdrawing their content from all platforms over the last two years to keep it for themselves. Disney+ is definitely an extremely strong player, it is a strong brand, it has a very strong content and it focuses on a similar target group as we do. So yes, it is a significant competitor.

Bigger than Netflix or HBO?

In my personal opinion as a man who has been analysing it for some time, I think that Disney+ will be substantially stronger than HBO. It can be seen globally. Disney+ has skyrocketed in the last two years and is already number two behind Netflix. I think that in the long term, it can easily be number one as investments of The Walt Disney Company in content are the largest in the world. I think that it has spent over 33 billion dollars on content acquisition and production just this year.

Which means that it will shake up the Czech market.

I think that its arrival will increase visibility of SVOD services in general. I have long thought, and I said that when joining CME, that the market will stabilise in the following years with the top three including Netflix, Disney+ and Voyo as a local complement to the two biggest players. If you look across the globe, HBO has been here for a very long time and the newly emerging brands have beaten it quite easily. Disney+ will be the most visible one out of the new players coming to the market this year. I strongly believe that our focus and strategy betting on local content, faces and topics and annual investments in Voyo Origiál should help it. If you look at the attendance of Czech cinemas, original Czech films always report much higher attendance and rating no matter how good a Marvel movie, Star Wars movie, or anything else is released. People here will always want a higher degree of quality local content with local faces. I believe that over time, the big platforms will make one or two local series a year but we will make ten, and in the following years up to twenty or thirty a year. I believe that the two major global services in the Czech Republic will be Netflix and Disney+ and we as the local leader will form the top three with them.

Is it true that for Disney+, HBO Max or Netflix the Czech market is not big enough and if we compare it with Poland, for example, there are many more original Polish series on Netflix than local production from the Czech Republic?

Poland is many times bigger. And what is specific to us is that for Czech viewers we have to dub the shows. People here are not accustomed to subtitles, we can see that on Voyo as well. The Czech market requires dubbing most of all markets where Voyo operates. Slovakia a bit less and other countries of our operation – Romania, Bulgaria and Slovenia – make do with subtitles.

Do you offer films in Slovak in Slovakia or just in Czech?

It is a combination. Usually what we buy for the Czechs we buy for Slovakia if it makes sense and there are free rights. This relates to acquisitions – when Czech dubbing is made in Prague, we use it. As for Voyo Originál, we have had no exclusively Slovak content but we are planning it for the next year.

Will you offer it on Czech Voyo then?

Yes, we will.

Is there any difference between the Slovak and Czech Voyo version?

For users, there is no difference except that we are more violet here and they are more turquoise there but otherwise, it is the same in terms of products. The way they consume content is also similar. But Slovakia, which is more focused on emotions, requires more romantic, emotional series. They work better there than in the Czech Republic. Here, crime dramas work extremely well. If we go farther to the Balkans, the differences in viewer preferences are bigger.

We have talked about users, about the number of subscribers, about dubbing – but what about the way people watch Voyo? Do you know what devices they use to watch it and what is the most frequent way?

People increasingly watch Voyo on TV screens, which is desirable for me because when they watch the largest screen at home where it is most comfortable and convenient it means that it is important to them. Nearly 60 percent of Voyo users are watching us through the TV screen.

Source: televizniweb.cz

AKA: COMMUNICATION INVESTMENTS TO SEE A DOUBLE DIGIT GROWTH THIS YEAR

The Association of Communication Agencies (AKA) expects marketing communication investments to grow by 12% this year. The investment dynamics is going to accelerate compared to previous years.

Despite the ongoing presence of Covid-19, the advertising market in the Czech Republic was doing relatively well in 2021. According to data from the Activation Research, which was carried out by Nielsen Admosphere for the Association of Communication Agencies, the market achieved a volume of CZK 124.7 billion (a year-on-year growth of 4.2 %).

“The research results indicate that advertisers have become optimistic again when it comes to investment volumes. Deferred household consumption also played its role,”

says AKA’s director Marek Hlavica.

The research expects that in 2022, the total volume of the market will grow to CZK 139.4 billion, going up by 12% compared to 2021. The advertising market comprises media and non-media channels. In 2022, media investments are expected to grow 6.1% to a total of 77.1 billion, non-media 19.7% to a total of 62.3 billion.

“With the end of the pandemic, we can expect a strong growth in activation campaigns, be it in sales support, or relationship and event marketing. Advertisers’ pressure on meeting their business objectives will be enormous this year, which is supported by the total numbers of the non-media market growth. The market significantly exceeds the expected inflation for 2022,” says David Čermák from AKA’s activation agency section.

INVESTMENTS IN MARKETING COMMUNICATION

(expert estimate of net marketing investments)

in CZK billion

Source: AKA, Nielsen Admosphere

DYNAMICS OF INVESTMENTS IN MEDIA AND NON-MEDIA CHANNELS IN 2021 AND ESTIMATE FOR 2022

media                                                    non-media                                 

Source: AKA, Nielsen Admosphere

According to Nielsen Admosphere’s data from spring 2022, retail channels have long been in the top 10 largest advertisers in terms of the volume of invested funds. Lidl, Kaufland and Albert took the top three places again last year. However, compared to 2020, their investments did not see a rapid increase. “Retail chains have maintained their dominant positions. At the same time, it is evident that on one hand, households again started caring for their equipment, and on the other, consumers started taking more care of themselves. Simply, “bread and circuses” is what applies at all times,“ describes the director of the Association of Media Agencies (ASMEA), Ondřej Novák.

Growing online and mobile support

The largest space among non-media channels is taken by online and mobile support, up 27%. It accounts for one fifth of the non-media channel spend. This trend may be expected also in the following years. Marketers expect the largest negative impact in gifts and presents while events and direct marketing have not fully recovered yet. Production of advertising and sponsorship are the main areas that have seen return on investments.

Hourly rates evolve with inflation

The average growth in hourly rates of ad and marketing agencies grew 5.5% year-on-year in January 2022. The reason is the inflation rate in the second half of 2021 and its continued rising trend. As expected, the ad market is growing especially in areas with higher rates of inflation-prone inputs (cost of labour, cost of energy and material needed for advertising production). This is based on the regular annual research of industry hourly rates, showing the average costs on the communication agency market.

State’s communication with people was insufficient

The data from the annual analysis prepared by CEEC Research for AKA and the PR Association (APRA) indicate that the volume of last year’s public contracts accounted for just 1.5% of the total communication market. In total, 686 contracts were awarded in 2021 in the total amount of 1.8 billion. According to AKA, the Czech Republic lags behind West European countries where these contracts represent 15-20% of the market.

Source: mediaguru.cz

EUROPE’S TV BUSINESS MODEL GETS SHAKEN UP BY STREAMERS

With U.S. streamers still driving local market growth, TV producers in continental Europe are juggling between the Hollywood studio business model — under which Netflix and the likes get all rights in return for full-financing plus a fee — and the pre-existing European model based on co-productions that leave indie producers with backend and give them more creative control.

But that is starting to change.

Thanks to the E.U.’s Audiovisual Media Services Directive (AVMS) — currently in various stages of implementation across Europe — there are early indications that giant platforms are slowly becoming more open to flexibly structured deals. Or, at least, that’s the hope going forward.

At its core, the directive simply states that streamers must offer a 30% quota of European content to European subscribers. But on top of that, E.U. countries are introducing nationally tailored legislation to make streamers directly re-invest a percentage of their revenues in each European country where they operate. And some countries — such as France and Italy — are in the process of enshrining into law new rules that will also force Netflix, Amazon Prime, Disney Plus and other streaming services to invest locally through independent producers and ensure that producers will retain a portion of the rights.

“First of all we welcome all the investments by the streamers in every country in Europe,” says Martin Moszkowicz, chairman of the executive board of German powerhouse Constantin Film. He notes that platforms such as Netflix, Amazon Prime Video and Disney Plus “are already investing a lot of money all over Europe in local-language [content] and also in international English-language shows.”

A recent report by London-based Enders Analysis says many European producers “have come to prioritize streaming platforms when pitching their best projects.” It also points out that Netflix is considered the biggest commissioner of scripted European content in 2020 — ahead of the E.U.’s major public broadcasters — and that Disney now has 60 European skeins in the pipeline for delivery by 2024.

But while Moszkowicz welcomes the streaming giants as investors, he says their business model is “ludicrous.”

“No rights are retained; there is no upside,” he notes. “There is nothing that we — and also the artists, the creative people that we employ — participate in the billions and billions of dollars of success that the streamers have.”

Moszkowicz says German producers “will use AVMS as much as we can to get a bigger part of the pie” and believes that “ultimately we will succeed.”

Here is a look at where things stand in the standoff between streaming giants and producers in four top continental European territories.

France

France, where the government recently approved AVMS regulation, leads the way.

Under the new rules, two-thirds of the streamers’ investment must go into accords for independent productions on which the rights will revert to French producers after 36 months.

That means that one-third of the streamers’ investments will continue to go into deals for shows with French producers under flat-fee pacts that instead will not allow them to hold on to rights.

But though this represents a landmark regulation, the new rules are raising questions on how these investment obligations will be applied and to whom.

The rules create competition among French producers to be included in the “two-thirds of the investment” corridor, says French producer Alexandra Lebret, who is managing director of lobby group the European Producers Club.

“How will the streamers select who are the producers who will be able to hold on to rights, and those who won’t?” she asks.

In early March, Netflix announced more than €200 million ($220 million) in investments in France as it unveiled its 2022 slate of 25 French originals, 10 of which are TV series.

These include “Standing-Up,” about France’s stand-up comedy scene, directed by “Call My Agent” creator Fanny Herrero.

Lebret points out it’s not yet known how Netflix is going to select projects that will benefit from the new rules and points out that Netflix’s biggest French original, “Lupin,” currently shooting its third season, is still being made under a flat-fee arrangement.

Germany

In Germany, where the Audiovisual Media Services Directive regulation is expected to soon be in place, there has been sporadic flexibility by the streamers when structuring deals for top-tier productions.

“The more interesting the property, the better your chances that you will get through with that [structuring a deal where rights revert],” says Moszkowicz.

One case in point is Constantin’s series “We Children From Bahnhof Zoo,” which went out on Amazon Prime Video in Germany.

It was also mounted as a co-production with several partners, including ITV-owned Cattleya in Italy, with Fremantle handling international sales.

Constantin is now mounting high-end TV series “Smilla’s Sense of Snow,” based on the Peter Hoeg thriller, for which Moszkowicz is confident he will be able to assemble a co-prod combining streaming partners and other types of broadcasters.

Moszkowicz also underlines that when it comes to pitching big-budget projects, Europe’s state broadcasters and pay-TV players still rep a viable alternative to streamers.

Last year, Constantin and veteran German TV exec Herbert Kloiber joined forces to form an outfit called High End Prods. to produce event-driven shows specifically made for Europe’s free- and pay-TV market.

Moszkowicz notes that the combined resources of pubcasters, such a Germany’s ARD and ZDF, France’s TFI, Italy’s RAI and the BBC in the U.K, is way bigger than the budget of any of the streamers.

“It’s virtually billions every year and they don’t get enough product, obviously because a lot of the really interesting stuff gets bought on a worldwide basis from the streamers,” he says.

High End will soon be announcing its first slate.

Spain

In Spain, even though AVMS has not been fully implemented, there is a sense that streamers are relenting on their all-rights diktat.

“I think that at the beginning they tried to divide and conquer,” says producer-director Alvaro Longoria, who runs Spanish indie Morena Films.

But now many other players have come in, including Disney, Apple and Paramount.

“A lot of them realize that they have to be flexible if they want to get the best talent,” he adds.

Longoria, whose Christmas comedy feature “Reyes vs. Santa” has been acquired by Amazon for some territories, adds that he finds it symbolically significant that Netflix boarded “Parallel Mothers,” the latest movie by Pedro Almodóvar — who as Cannes jury president in 2017 slammed the streamer.

Netflix just took exclusive Latin American rights on “Parallel Mothers.”

“The whole business model is changing all the time and streamers are the first ones that are happy to adapt,” he says.

Italy

In Italy, where AVMS implementation is still languishing, there are small but significant signals that streamers are starting to budge.

“Some dynamics with the platforms are changing,” says Rosario Rinaldo, head of production company Cross Prods., which is owned by Germany’s Beta Film.

Cross is producing edgy Amazon Italy Original drama “Prisma,” for which Amazon will have SVOD rights in perpetuity.

Rinaldo could be allowed to sell “Prisma’s” free TV rights locally after the show plays exclusively on Amazon globally, if Amazon decides not to commission a subsequent season.

“There is more attention toward producers’ needs during development,” Rosario says, citing a willingness by Netflix and Disney to co-develop projects with Cross.

The prime example in the Italian market of a big U.S. player being willing to engage with Europe’s co-production model is HBO and pubcaster RAI’s “My Brilliant Friend,” the series based on Elena Ferrante’s novels.

In early February, the third installment of the series, “Those Who Leave and Those Who Stay,” premiered on RAI to stellar ratings before launching stateside on HBO and HBO Max.

“As a producer, the search for forms of collaboration between various types of platforms and other broadcasters, including public broadcasters, is clearly part of what I’m seeking,” says “My Brilliant Friend” producer Lorenzo Mieli.

Recently, Mieli, through his Fremantle-owned the Apartment shingle, has been able to mount a three-way co-prod among RAI, Franco-German network Arte and Netflix.

They are making veteran auteur Marco Bellocchio’s upcoming TV series “Eastern Notte,” about the kidnapping and assassination of former Italian prime minister Aldo Moro by Red Brigades terrorists.

“The possibility of business models evolving — and disrupting monolithic models — is born from our ability as producers to propose projects that make this disruption worth it,” he says.

Source: variety.com