Film distributor CinemArt has won another round of litigation against Ulož.to. It concerned Šarlatán movie, which Ulož.to was offering for illegal online viewing in 2020. CinemArt subsequently blocked everything through a preliminary injunction through the court. However, Ulož.to then sued and claimed damages. The city court has now rejected its claim.
The latest judgment is not yet final. According to it, Ulož.to is to pay CinemArt’s legal costs as well.
Lawyers of Uloz.to cloud, a. s., otherwise demanded about 800 thousand crowns from CinemArt in this part of the case. They justified the amount on the grounds that the company was forced by the court to refrain from allowing any digital downloads of the Šarlatán movie because of the distributor, thus incurring large costs.
Specifically, this included, among other things, having to hire people to search for files with the word “Šarlatn” / “Charlatan” in them, review them, or block them. According to Ulož.all this was done over many months.
CinemArt has long rejected the counterparty’s demand for any compensation. It insisted that the image was and is offered illegally on the Ulož.to website and the court’s decision to block everything was correct, complying with Czech and European law. He also pointed out that the distribution of films is not a cheap affair and it is customary to pay those who own the copyright to watch them.
The battle over interpretation
After the first decision of the City Court – i.e. after December 2020 – the High Court in Prague intervened in the “Šarlatán” / “Charlatan” case, which in turn upheld the position of Ulož.to, which is generally based on the right to freedom in the online space.
On procedural grounds, the High Court overturned the City Court’s decision, stating that similar cases must be better and more precisely formulated in the future.
It was on the basis of this legal opinion that Ulož.to subsequently sued CinemArt for the aforementioned sum of eight hundred thousand.
The Šarlatán movie is otherwise still available for download. “Independently of the latest court decision, the litigation regarding this illegal offer continues. We continue to seek an end to this illegal activity,” said CinemArt spokesman Petr Slavik, adding that a final decision “will be a long time coming”.
For three quarters of a year now there has been a ban on skipping ads in the back view of IPTV operators in the broadcasts of Prima group TV stations. What the measure has brought and what the next steps will be, representatives of the Prima group explain.
The MediaGuru.cz editorial team talked to Lukáš Kubát, Petr Milo and Michal Stárek from the Prima Group about the possibilities of blocking skipping ads and further plans in the field of internet television. They assess the step, which the Prima Group has taken on 1 June 2022, as a success. “We have saved over 20 thousand advertising GRPs. That’s about 150 million crowns,” they say. Prima representatives also spoke about how they plan to implement the content of the new Prima+ video library into the operators’ offers.
On the first of June it will be a year since operators had to deploy one of the solutions you suggested regarding skipping ad blocks on Prima Group channels. How do you evaluate this step from your point of view in hindsight?
Lukáš Kubát: We see it positively, because we have saved the GRPs from which we finance our production, and the GRPs are no longer getting lost somewhere. We have secured the monetization of the viewer because IPTV is growing and gaining importance. If we let that go, like timeshare viewing, the problem gets exponentially bigger. In 2021 we lost around 30k GRPs, by 2022 it would be 40k. The increase is dozens percent if we wouldn’t act. By stepping on the brake and asserting our rights, the market has somehow gotten used to it. It was a huge drama, but I think the emotions have subsided and the operators can see for themselves that as long as they implement solutions that improve the user experience (e.g. shortened ad block, fast-forwarding of content, 60-second window with the ability to fast-forward ads at the start of viewing, accurate show starts), nothing terrible happens. We understand that this has been difficult from the operators’ perspective, and we appreciate their constructive engagement with us.
You obviously commend the move as a good decision, but the operators were not so happy. They mostly agree that this is a constraint that severely limits viewer satisfaction. One of them even called the move illegal.
Lukáš Kubát: We see it as a way to re-establish the value of our content. It was kind of a preface to our VOD platform. If our content is to have any value, we can’t give it to people for free, because in the world of content, the person who created it has to live off something, and that’s either advertising or subscriptions. If I’m putting an ad out there and someone says, “Hey, don’t watch that ad. Just look at the content.” – then it stops working for me financially. That’s why I’m glad that today we can offer our viewers the Prima+ service, where the Premium tariff allows you to watch our content without ads.
The obligation to block ad skipping, or your agreement with the operators, has been in place for about three quarters of a year at this point. So is this model set up well in your opinion?
Lukáš Kubát: From the feedback from operators, we see that the most dissatisfied are those who have not implemented any improved solution that Prima allows, and have only disabled forward scrolling for both the program and ads. I would imagine that some of the larger operators will click something in their platform and say, “Sure, don’t skip the ad, skip the content.” That it would be that simple. It shows the less flexible approach of some of the big ones, and conversely the flexibility of the small operators.
Petr Míl: We have provided compensation for the ad skipping ban and some technical means to improve the user experience from a different perspective. We have offered operators precise start times for shows and the user doesn’t have to search for them. We also made it possible to skip ads after a few minutes.
Lukáš Kubát: When we talk to operators after nine months, this is the point they really appreciate. The operator says: Leaving aside everything that bothers me, the punctual start of shows really improves the viewer experience. When a viewer watches a show and has the option to skip, finding the exact beginning is a bit more annoying than having the show start exactly where it’s supposed to start.
I would go back to April last year, when the Chamber of Commerce held a meeting with representatives of some of the operators and invited journalists. One of the visibly dissatisfied operators was 4net.tv, which even then expressed its dissatisfaction with the fact that this was a one-sided solution that had not been discussed with them. This is also confirmed by T-Mobile, which complains that there is a lack of sufficient discussion between media houses and operators to address the issue. The operator has repeatedly asked for standardisation of the technical solution and approach to playing advertising blocks, but unfortunately this has not happened. Why?
Petr Míl: Because standardization could not be found, we came up with our own solution and we offer that it can easily become a standard.
When I followed the discussion and the criticisms at the time, my understanding was that the operators did not have a manual that clearly told them what to do and that, on the contrary, these conditions were set out, I don’t know if I’m using the right word, in a lax way, and that each operator had to deal with it on his own.
Lukáš Kubát: We had it described in general terms, because the brief was simple: disable ad skipping. Some operators made it a problem because we found out that they buy the platform somewhere, for example, and therefore they have to have a detailed specification for their supplier and they have to set it up. I understand that it would be easier if there was a technical bible that described the terms exactly. We told the operators how we wanted to do it, but we conducted it as a dialogue. It’s hard to please everyone when introducing a new solution. If we came in and said, here’s the documentation, we’d be looking forward in nine months when it’s done. We said to the operators clearly, the problem is with you and you are allowing customers to skip advertising in timeshifts, so please prevent it. The discussion has been going on for two or three years and historically there has been an effort to get operators to ban this.
But nothing has been actively done about it…
Lukas Kubát: We told the operators that we would give them the technical cooperation to say where the pause starts and where it ends. We will “tag” your program and you have to tell us where the standard is. We found two in the world. One is the API and the other is SCTE-35 (the markup that US regional TV used to use, ed.). You tell us what kind of tagging you would like and we will give you the technical cooperation. And the operators then make sure that when that marking occurs, it’s impossible to skip the commercial.
Popis tabulky: Improving the ranking of Prima Group stations on operators’ menus in 2023
Popis tabulky: Evaluating the solution to the ban on skipping ads in delayed viewership
So, the current situation is that this obligation somehow works for operators, and one of them even allows you to insert online advertising, which is the optimal solution for you. What is your next plan and where should it go from here? Is it optimal for you to have multiple solutions or would only one model be optimal for you? T-Mobile has written to our editorial team that from June 1 they plan to extend the ability to skip an ad block after three minutes to four.
Lukáš Kubát: We announced this plan, where we would go for the possibility of skipping ads after three minutes, which is half of the ad break, to operators at the Chamber of Commerce in September 2021. Here we also mentioned that we plan to increase from three to four minutes in the future. There is no reason why an IPTV viewer should see fewer ads than any other. We want to keep it at eight minutes for now. For operators who will have the option of embedded online advertising, the limit will not change and will remain at five minutes.
Operators also said that their statistics show a drop in the viewership of Prima Group programmes in back-to-back viewing, but did not give any specific figures as this is internal know-how. Do you have any statistics in this respect?
Lukáš Kubát: We do not have data from the operators. They mention it, but sometimes it is difficult to distinguish in their view when it is TV season and when it is the so-called off season. Operators saw a decline in the summer after the introduction of this condition, which was on June 1, but this is a decline that happens every year and should be compared year by year rather than month by month. We don’t see a significant drop in viewership from the data we get from Nielsen. We see that Prima’s viewership is growing and that we have grown from a share of 25% to 27% in the 15+ audience group. We see that IPTV is not growing as fast, it’s flattened out more. We are seeing some impact but it is not material. We are growing as a group and we are happy.
Petr Míl: There may have been a slight change in user behaviour where, if they have disabled the ability to skip ads, they can watch our show live and on a competitor’s TV they can watch the show from a recording and skip the ad. For us, viewership remains because whether the viewer bites into the show live or in delayed viewership is irrelevant to us.
The chart you presented to us shows that in the 15+ group you have managed to reduce the gap between you and the Nova group over the years. Clearly, then, you don’t see this as a fundamentally bad decision. So did everything turn out as you expected for you?
Lukáš Kubát: Exactly. 22,000 GRPs saved is approximately 150 million crowns for us, so in six months we are about half of what we set out to do. We said we were losing around 300 million, so we consider that number confirmed.
I also asked on the internet about customer satisfaction of individual operators, who understandably see it as viewer discomfort. Generally speaking, those who don’t care or can tolerate this restriction are very few. Quite often there have been comments that the viewer has stopped watching Prima altogether, or doesn’t understand why this step is being taken when there are usually more than a hundred programmes available on pay services.
Petr Míl: The basic view is that we are funded only by advertising money. In order to produce shows that users watch, we need them to watch advertising. By skipping advertising, they have made it impossible for us to fund production.
Lukáš Kubát: It’s a tough view of the viewer and I can put myself in their shoes. In their campaigns, the operators enticed viewers to skip the ads. But they didn’t have the rights to buy it. So it’s a problem on the part of the operators who historically have not informed their customers correctly. The operator said: “I’ll get a new customer from terrestrials, they can watch shows on delay, skip ads, and save a lot of time.” No one addressed how the operator would deal with Prima. The viewer doesn’t see it.
And, as we have already said, there will certainly also be a difference in the perception of these moves by customers of different operators. If viewers are with operators that have fully integrated all the options we have enabled for IPTV operators (such as sledovani.tv), they certainly don’t feel the discomfort of watching shows as strongly as viewers of operators that have not taken advantage of these options. However, we believe that the situation will improve in this respect in the future.
Popis tabulky: Daily viewership results in 15+, source: ATO – Nielsen Admosphere, live + TS0-3, as of 1. 3. 2023
The ability to rewind is undoubtedly one of the benefits of IPTV or internet TV, so you can’t blame customers for not liking it when people have this functionality taken away.
Petr Míl: It should be emphasised that we do not prohibit rewinding of programmes, we prohibit rewinding of advertising. The fact that some operators have done this by banning replays of our programmes altogether is their decision.
O2 has solved the ban on skipping commercials by banning the ability to rewind altogether. At the beginning of last year, there was already an information bar on your stations that the operator’s clients would lose your programmes within a few weeks, which in the end did not happen. So what are your current relations with one of the biggest operators on the market?
Lukáš Kubát: We are glad that we finally signed the contract. In February we did not have it yet. But the essence of the problem was that they were distributing our channels without a valid contract.
This big operator was distributing your channels without a contract? That’s hard to believe.
Lukáš Kubát:We couldn’t agree on new terms. One of them was the implementation of limiting ad skipping. The contract said that we would implement it within a year. We said to them, “You are aware that we are implementing a ban on skipping.” And that was actually one of the points of the conflict we had.
Michal Stárek: All the operators have committed to these conditions by a certain date, and only O2 said no.
So where do your relationships stand now?
Lukáš Kubát: We have a contract, the relations are normalised and good.
Okay, but as far as the positioning of your programmes in the O2 TV offer is concerned, it’s not quite optimal. After the inclusion of the channels of the Nova group in better programming positions, your stations were moved to worse preferences.
Lukáš Kubát: We cannot influence the operator to place us on particular positions that we have not agreed on. In particular, the operator O2 perceives the situation in such a way that if it cannot offer the viewer an improved quality of content or user experience, it will say that it does not want to have these programmes at the top. So, while we are in the top 30, we are not quite in the premium positions. O2 and rival group Nova have the same owner, taking out our positions without the ability to negotiate and replacing them with Nova group channels seems to us to be problematic from a competition perspective.
Petr Míl: Unlike O2, we have agreed with some operators to place our channels in better programming positions.
I will ask about that in a moment. Can you tell us what the distribution agreements with the operator generally contain? I understand you can’t comment on specific agreements with individual operators, but can you say what you are looking out for in them?
Lukáš Kubát:To put it simply, we sell our channels. We sell them either in live mode or in delayed viewing mode. IPTV has both contracts because it offers timeshift and within that there is a start over, a seven-day timeshift, and of course there are defined terms and conditions on how the content can be handled. For example, it treats how many simultaneous streams can be broadcast, how many devices can be registered, etc.
My colleague indicated a moment ago that several operators have moved your thematic clones to more attractive positions this year. How have you done that?
Lukáš Kubát: We offer a discount for premium positioning of our programmes, but we will not disclose the amount.
Let’s go back to O2 TV. You have a contract, but the relationships are probably not the best right now. Are you still going to negotiate with them?
Lukáš Kubát: We definitely want to build long-term relationships with operators that work, and we are interested in having our channels in the top positions, but it’s always a question of agreement. I believe that this will improve in the future.
In our interview, you mentioned your new video library prima+ several times. Will you try to implement its content directly into operators’ offers in the future?
Lukáš Kubát: The new service allows us to expand the range of content we can offer to the viewer. Naturally, we want to make this content available to operators. We will look for a form of cooperation and we are talking to operators about what is a good business relationship, setup, display, integration.
So you’re at the beginning…
Lukáš Kubát: Exactly. We want our content to reach the viewers and the operator is the aggregator that has the ability to offer that to the viewers. Viewers should be able to watch ZOO in preview or watch it without commercials, both options are offered by Prima+. If a seven-day archive is not enough and he wants to watch all the episodes, he has the option. We want to expand our relevance with operators and offer viewers the widest possible range of audience favourites.
Police officers from Poland’s Central Bureau for Combatting Cybercrime (CBZC) have closed one of the largest pirate site in the country offering viewers movies and series.
According to the anti-piracy body Signal, last November CBZC arrested a 28-year-old man responsible for the technical service of the site, named Zaukaj.vip. Then in January it also detained the owner and originator of the site, with the 33-year-old man in addition being charged with fraud.
Commenting on the development, Piotr Wójtów from the Anti-Piracy Section at Canal+ Polska, a member of the Signal Association, which brings together broadcasters and distributors of video content in the fight against piracy, said: “Zalukaj.vip was one of the largest pirate websites disseminating movies and series. Its activity was based solely on the unlawful distribution of audiovisual content. This resulted in huge financial losses on the part of entities offering legal access to films and series in Poland.
“Joint actions of the victims and law enforcement authorities led to the closure of the website and the arrest of those responsible for its operation. This shows that the fight against piracy is taken seriously, and the people running such services must take into account the disclosure of their identity and the consequences”.
Teresa Wierzbowska, the president of Signal, meanwhile pointed out the inevitability of a penalty. She added that an additional warning for pirates should also be the verdict heard by the owner of another website, which was ordered by the court in Bialystok to pay over PLN47 million to copyright holders in 2021.
Signal points out that Zalukaj.vip was illegally disseminating video content since at least February 2020.
The Alliance for Creativity and Entertainment (ACE) said it has shut down an illegal video-streaming site that was racking up millions of monthly visits.
ACE, whose members include the major studios, said that Streamzz, an Ahlen, Germany-based global file hosting service, was drawing more than 7 million monthly visits to its ill-gotten streaming video gains, with the second most visits coming from the United States.
The site had been operating since 2019 and had hosted more than 15,000 TV show and 75,000 movies for illegal streaming, supplying more than 60 pirate websites, ACE said.
ACE said it got an assist in the takedown from member Constantin Film. “Piracy continues to undermine the legal market and the investment into new and exciting content,” Constantin executive VP Philipp Wohlfrom said.
“The shutdown of Streamzz is fresh proof that no one in the content piracy ecosystem — whether they’re a streaming service, video streaming host or anything in between — is above the law,” said Jan van Voorn, executive VP of the Motion Picture Association and head of ACE.
European broadcasters, represented by the Association of Commercial Television and Video on Demand Services in Europe (ACT) and the European Broadcasting Union (EBU), have backed WIPO Member States to finalise the WIPO Broadcasting Organizations Treaty.
According to ACT and EBU, the treaty would harmonise the anti-piracy protections for broadcasters by setting minimum standards internationally as well as perform as an anti-piracy instrument to protect programming.
In a joint statement the pair commented, “Protecting broadcasting organizations from illegitimate actors has never been more important: global piracy significantly undermines the commercial value and exploitation of live and premium content. This content is a core pillar of media (re-)financing and remits, so they must be able to act quickly and efficiently to fight piracy worldwide.
“The Second Revised Draft Text for the WIPO Broadcasting Organizations Treaty (SCCR/43/3) is a balanced instrument aimed at protecting the programme-carrying signal. The revisions allow for a common understanding of the scope of protection and provide efficient tools to fight piracy, both on domestic and international levels.
They added, “the signatories are of the opinion that the Second Revised Draft Text for the WIPO Broadcasting Organizations Treaty covers the principles necessary for the legal protection of programme carrying signals; and, therefore, could serve as a basis for finalising the text of the WIPO Broadcasting Organizations Treaty in view of convening a Diplomatic Conference for the adoption of said treaty.”
ACT and EBU said European broadcasters will continue to support WIPO’s battle against piracy globally.
The EU’s DSA/DMA Package entered into force at the end of 2022. The Digital Services Act and Digital Markets Act aim to create a safer digital space where fundamental rights of users are protected and to establish a level playing field for businesses.
The Digital Services Act (DSA)
The DSA entered into force on November 16, 2022 in the EU. The Digital Services Act includes rules for online intermediary services, which millions of Europeans use every day. The obligations of different online players match their role, size and impact in the online ecosystem.
For the first time a common set of rules on intermediaries’ obligations and accountability across the single market will open up new opportunities to provide digital services across borders, while ensuring a high level of protection to all users, no matter where they live in the EU. The Digital Services Act significantly improves the mechanisms for the removal of illegal content and for the effective protection of users’ fundamental rights online, including the freedom of speech. It also creates a stronger public oversight of online platforms, in particular for platforms that reach more than 10% of the EU’s population.
Here are key ways, rights and obligations which are newly provided via the DSA:
1) Protecting us from dangerous goods and illegal content
Without DSA there would be no consistent flagging system for when you see illegal content, goods or services online. The DSA makes it easier for you to report illegal content, such as hate speech, and goods such as counterfeit products by introducing mandatory user-friendly flagging systems. According to the DSA, platforms need to process alerts in a timely and diligent manner and keep you updated and to provide you with clear information about whom you’re buying goods or services from online.
2) Helping us tackle cyber bullying
Cyber bullying and cyber violence are an increasing problem for children and adults alike. The DSA introduces stronger protections for people targeted by online harassment and bullying. This includes making sure any non-consensual private images and other abusive, illegal content that are shared can be quickly flagged by users.
3) Limiting targeted advertising
The DSA introduces transparency around advertising, making sure it is clearly labelled, and information is available about who is placing the ad and why you are seeing it. It also introduces a ban on certain types of advertising on online platforms, like advertising based on sensitive data categories including sexuality, religion or race, and a complete ban on targeted advertising of children based on their personal data.
4) Helping us to understand and challenge content moderation decisions
At the moment, if a platform decides to take down something you post, it is hard to contest that decision. The DSA will allow us to challenge platforms through an easy-to-use, free-of-charge complaint mechanism.
5) Simplifying terms and conditions
The DSA ensures that very large online platforms (those with over 45 million users in the EU) provide concise and unambiguous summaries of their terms and conditions, so we all know what we are accepting.
The Digital Markets Act (DMA)
The DMA entered into force on November 1, 2022 in the EU. The DMA aims to secure fairness in digital economy and establishes certain restrictions and obligations for big tech. The Digital Markets Act establishes a set of narrowly defined objective criteria for qualifying a large online platform as a so-called “gatekeeper”. This allows the DMA to remain well targeted to the problem that it aims to tackle as regards large, systemic online platforms. The DMA will be applicable as of beginning of May 2023. Within two months, companies providing core platform services will have to notify the Commission and provide all relevant information. The Commission will then have two months to adopt a decision designating a specific gatekeeper. The designated gatekeepers will have a maximum of six months after the Commission decision to ensure compliance with the obligations foreseen in the DMA.
Here are key ways, rights and obligations which are newly provided via the DMA:
1) Business users who depend on gatekeepers to offer their services in the single market will have a fairer business environment.
2) Innovators and technology start-ups will have new opportunities to compete and innovate in the online platform environment without having to comply with unfair terms and conditions limiting their development.
3) Consumers will have more and better services to choose from, more opportunities to switch their provider if they wish so, direct access to services, and fairer prices.
4) Gatekeepers will keep all opportunities to innovate and offer new services. They will simply not be allowed to use unfair practices towards the business users and customers that depend on them to gain an undue advantage.
The DMA and its main benefits for Users:
1) Empowered citizens and users
Today, platforms optimise the presentation of information to capture attention and drive revenue, but their users are often unaware of how their systems sort content and how platforms profile them. The manipulation of recommender systems and abuse of advertising systems can fuel dangerous disinformation and propagation of illegal content.
2) Quality digital services at lower price
The systemic role of a few online platforms affects the lives of billions of users and millions of companies in Europe. Some companies have a major impact on, control the access to, and are entrenched in digital markets. They can impose unfair take-it-or-leave-it conditions on both their business users and consumers.
The Prima Group is now the holder of an 80% stake in Impression Media, which is mainly active in the online advertising market. It is already the owner of Media Club.
Prima Group has completed the acquisition of the media group Media Bohemia. It now holds an 80% stake in the online media agency Impression Media. This strengthens Prima’s Media Club representation in the field of online and programmatic advertising.
Impression Media represents more than 153 websites from all segments, which reach over 6.6 million users per month on the Czech market, and thus ranks among the top 3 players in the online advertising segment. Thanks to the acquisition, the Prima Group’s portfolio will also be expanded by the marketing agency Programmatic Media, which offers programmatic planning, web development and web analytics, social media marketing, PR communication, production and brand employment. The agreement also includes the websites Femina.cz, Autoweb.cz, Magazinzahrada.cz, Living.cz, which will be newly integrated into the Prima Group’s online editorial team.
“The Media Bohemia media group is optimizing its product portfolio and in the coming period will focus on the development of key brands such as Rádio Blaník, Hitrádio, Fajn rádio and Rock rádio and digital activities related to them,”
Miroslav Hrnko, CEO of Media Bohemia, explains.
“This is a strategic move by the Prima Group. Our sales agency Media Club is a market leader in the field of television and radio advertising. With the acquisition of Impression Media, we are significantly strengthening our online advertising business and will become one of the leading players on the Czech market. Thanks to our rich portfolio of websites, we can offer clients precise targeting of campaigns to a selected segment,”
says Vladimír Pořízek, Commercial Director of Prima Group.
Impression Media will be newly incorporated under the Media Club commercial representation and will continue to provide the same services to its clients as before. Roman Stolejda will remain the company’s managing director, who will be joined in the position by Petr Hatlapatka, commercial director of Media Club’s online division. As part of the acquisition, the 40-strong team will be relocated to the Prima Group address. Roman Stolejda (13%) and David Bauckmann (7%) remain minority shareholders in the company.
Petr Miláček, director of analysis at the Prima Group, will join Programmatic Media’s executive team and will focus on the company’s development in the area of media planning. “We would like to offer smaller clients who do not have their own media agency a full service, including media planning and campaign implementation. That is why we will take advantage of Petr Miláček’s extensive experience and plan to strengthen this area,” adds Vladimír Pořízek.
Media Club was established in 2013 and represents the Prima Group in advertising sales on nine TV channels (Prima, CNN Prima News, Prima Cool, Prima Max, Prima Krimi, Prima Love, Prima Zoom, Prima Show and Prima Star), as well as in the Prima Group’s online projects, print magazines, public events and esports in conjunction with PLAYzone. Media Club also continues to represent the music stations of the Óčko group, the channels of the Barrandov group, the Paramount Network, the children’s channel Nickelodeon and Nick Jr. and the channels represented by Atmedia Czech. Among radio stations, it represents Impuls radio, Europe 2, Frekvenci 1, Radio Kiss, Radio Beat, Country Radio, Signal Radio, Radio SPIN, Radio 1, Rock Zone, Radio Bonton, Dance Radio and Český Impuls. Newly added to its portfolio are websites commercially represented by Impression Media.
Hellspy, the internet data sharing platform, has decided to be closed as of next month. This is a direct response to the amendment to the copyright law, which has been in force since the beginning of this year. The creators have informed users of the service in an email, saying that they will be refunding their subscription money.
Hellspy, as one of the largest data sharing servers in the Czech Republic, has been a thorn in the side of copyright protectors for some time. On this portal, as well as on a number of other Internet storage sites, people have been sharing movies, music, games and illegal copies of various programs.
For example, Weemazz, a company that searches for and removes films and music from online repositories, said last year that requests are sent to operators every day to remove copies of thousands of copyrighted works.
While Hellspy promptly deleted the reported copies, illegal content was still abundant on the site. An agreement last September, when the I&Q Group – the operator of the Hellshare and Hellspy online repositories – agreed with representatives of commercial TV stations to deploy filters that would automatically search for and delete illegal content, did not help much.
Accountability for users
But the new year was a turning point, when the aforementioned amendment to the Czech Copyright Act following the European regulation came into force. According to the amendment, the operator essentially assumes responsibility for its users – it is responsible for what data users upload to the server.
Hellspy reacted to this by scrapping searches after the new year. No matter what terms you typed into the search box on its site, all you got was a message that the file you wanted could not be found.
Considering that this year the service was only available for downloads as part of a subscription fee or for credits that users earned by uploading data, the company lost a substantial amount of funding with the new year. That’s apparently why the company has decided to cut back on operations from the coming month.
It will return the money
“Due to the legislative situation in the Czech Republic and in order to make the Hellspy service as transparent as possible to its users, we would like to inform you that the Hellspy service will be discontinued on April 1, 2023,” the operators of the service wrote to their users.
People who have subscribed to the service for a longer period will not lose their money. “We also want to inform you of your entitlement to a pro-rata refund of your purchased unlimited download,” the email sent out reads. People can request a refund directly on the Hellspy.cz website.
Czech television’s stations remained the strongest TVgroup in terms of audience share in the universal audience group over 15 years old in February. Their share in full-day broadcasting was 31.3 %. They also had the highest share in this audience group in prime time. This is shown by the official ATO-Nielsen Admosphere audience measurement data.
Nova Group stations remain strongest in the 15-54 audience group and narrowly so in the 15-69 audience category in both day and evening time slots.
Prima Group stations confirmed the second highest share in the universal 15+ group. This is true for both daytime and prime-time broadcasts.
The share of Czech Television stations decreased compared to the same month a year earlier. This is due to a decrease in the share of the sports channel CT Sport, which offered coverage of the Beijing Olympics last February and therefore had an above-average share last February. At the same time, it should also be taken into account that CT3 is not broadcasting this year. On the contrary, both main channels of CT – i.e. CT1 and CT2 – improved year-on-year.
The growth of the main commercial TV groups continued in the second month of this year. The Nova group gained 1.6 percentage points (the average for the target groups) in all-day broadcasting, with an increase of around 0.5 percentage points in prime time. Among the Group’s individual stations, the main channel Nova and the thematic stations Nova Gold, Nova Fun, Nova Lady and Nova Action improved year-on-year.
Prima Group stations also improved by more than one percentage point on average in all-day broadcasting. On the other hand, the group’s share in prime time decreased year-on-year. The Prima Krimi channel in particular improved year-on-year, followed by Prima Max, Prima Zoom, Prima Star and CNN Prima News.
Also noteworthy is the increase in the share of Atmedia and Television Seznam.
The most watched February programmes were the miniseries Docent (the most successful episode 2.19 million), the series Crime Scene České Budějovice (the most successful episode 1.6 million) and the film Prvok, Shampoo, Dot and Karel (1.5 million). All these programmes were broadcast by Czech Television in February.
In the last month alone, two more video libraries have been launched in the Czech Republic. Eight services are already competing over paying customers that will watch movies and TV series on their platform each month. Voyo, operated by Nova TV, has just reached 500,000 subscribers for the Czech Republic and Slovakia combined, and is estimated to be catching up with Netflix.
There are more reasons for this. The media company CME, which Voyo and Nova are a part of, was bought by the financial group PPF for almost CZK 50 billion a few years ago. In order to revive the dormant video library, it moved the most watched Nova series, Ordinace v růžové zahradě 2, to it. And she put media manager Daniel Grunt in charge of the video library. All this at a time when Czechs, shut in at home because of the pandemic, started paying more for films and TV series on the Internet.
With the media staggering from one crisis to the next, Grunt built Nova a business with estimated revenues of up to CZK 1 billion a year in two years. And while rival HBO has stopped making films and TV series in the Czech Republic due to cost-cutting, Voyo and Nova announced 46 new releases last week. “We are becoming the biggest video content creators on the Czech market,” Daniel Grunt now announces in an interview with Aktuálně.cz, his first as CEO of Nova. He became the new CEO in January, when, in light of the success of Voyo, he assumed the influential post of the head of the largest Czech commercial television, which had previously been held by Vladimír Železný and Petr Dvořák. He immediately replaced Klára Brachtlova and Jan Vlček, who moved to CME.
How many streaming services do you subscribe to?
We have Voyo at home, Netflix, HBO Max, Disney+, Eurosport, Amazon Prime Video and now newly Skyshowtime. Plus Spotify for music and Xbox Gold for games, so nine services.
In addition, people pay for newspapers and websites, ad-free YouTube, podcasts, video interviews, Twitter account verification, prospectively maybe translators or artificial intelligence. Isn’t that too much?
It is too much. And I don’t think we’re going to end up paying for ten services. It’s going to get overwhelming. In America today, people pay for an average of four video services per household. That’s going to be the ceiling. In the Czech Republic, we estimate that about one million households subscribe to an average of 1.5 services. I think it will go in a similar direction to Scandinavia, where local Viaplay has taken hold alongside multinational video services like Netflix and has some three million users. In Scandinavia, people pay for an average of 2.5 services per family, and somehow it will be the same in the Czech Republic.
Do you think that Czechs will pay for, say, multinational Netflix and local Voyo on top of that?
We are betting that one local player will succeed alongside the big players and that will be our Voyo. Video services like Netflix are aware of the importance of the local factor, but they lack the knowledge of the mentality, how people live here, what are the historical stories behind them, what they like. We tailor-make content for them with that experience. It’s not just in the Czech Republic and Slovakia, Voyo has already surpassed Netflix in Slovenia, which has two million people, and it’s the market leader there, and it’s taking off nicely in Romania. Just as you have Viaplay in Scandinavia, we have the chance to become the local leader for Central and Eastern Europe.
How did we even get to the stage where we are choosing from eight video libraries? For example, there have never been so many mobile operators in the Czech Republic.
I think covid was the tipping point that taught Czechs to pay for content on the internet, and now everyone is arguing over who the money ends up with. Of course, there used to be some number of Netflix users or people paying for games or in-game purchases on the App Store and Google Play.
The increasing penetration of smartphones with data plans, when it became terribly easy to buy something online, played a major role. But it was covid that made the difference. In the end, it doesn’t matter what one pays through. The hardest thing is to get a person who has never paid for anything on the internet to spend their first penny. Then it’s on.
You just announced that Voyo has 500,000 subscribers in the Czech Republic and Slovakia. Can we say that there are about 400,000 Czechs paying?
Let’s say you’re getting close to the truth.
Yet the service started in 2011 and has been stagnant for ten years?
In short: three years ago, investment group PPF bought CME, including Nova and Voyo, assessed that the media market would grow in terms of paying for content from viewers, set a target of getting one million subscribers for Voyo by 2025, and I was tasked with this as the new head of digital content.
It was a challenge for me. When I told my friends in the business about the ambition, they tapped their foreheads wondering if I was crazy that Voyo had a few tens of thousands of subscribers after ten years of existence. Two years into the pandemic and we’re a long way from there.
According to a study last year by Nielsen Admosphere, not only has the willingness of Czechs to pay online increased, but it is higher among people aged 15 to 24 than among older people. Are you taking this into account?
The most important group for Voyo is the 25 to 45 year old group, typically young families with children. It would be tempting to go after the youngest, who are already used to paying online, but Netflix is burning its brutally expensive series into them and we can’t compete with that. Also, this is a fairly low loyalty group, it goes where the content is right now.
What about the caveat that if you don’t enter the lives of Generation Z now and show them that you care about their issues too, you’ll never reach them again?
We do everything for Voyo with the ambition of picking up a million subscribers, we can’t afford to only go after such a narrow target group. But we try to meet them on social media like TikTok or Instagram so that they have an experience and insight into what they find with us. And in early March, we’ll be launching a series called Sex O’Clock, which is enjoyably cheeky and will be watched by teenagers and 50-somethings alike. I enjoyed it. And I’m sure my 15-year-old son will enjoy watching it too.
You’ve gained hundreds of thousands of subscribers at a time when the boom is over and households have started to cut back because of inflation and energy prices. So are the wealthier people paying for Voyo?
It’s a question of what you call richer, 159 crowns a month for a bill for the whole family is less than one cinema ticket. These are people who have a computer, a smart TV or a tablet, know how to use it and are interested in new things. The internet literacy evokes the young, but at the same time that group is expanding a lot, we have quite a few subscribers over 50.
How do you know that? When you sign up for Voyo, you don’t fill in your date of birth, your gender, or where you live.
We have surveys. We didn’t ask subscribers for more data because we needed to grow quickly, so we purposely removed any barriers they would encounter on the way to payment. We wanted to make it as simple as possible. For the same reason, we don’t give people multiple subscription types to choose from.
Would Voyo have half a million viewers if it wasn’t for Ordinace v růžové zahradě 2?
It’s hard to say, it certainly helped enormously. People have been watching Ordinace for 15 years on Nova. When we moved it to the internet, it was also a symbolic message to the market that we were serious and that Voyo would not be a superstructure. We risked losing a large part of our audience. But it brought a jump in subscribers, and there are still more coming for Ordinace.
900,000 people a week watched Ordinace, so by moving to Voyo you lost advertising revenue, so you were risking tens of millions of crowns a month?
Yes. And the costs remained because we continue to make the series in the same quality, with the same faces, in the same length.
The Nova Group earns over five billion crowns a year from TV advertising, more than half of the whole market. Will that figure fall as people move online?
It’s not so black and white. I don’t believe the majority of the population will watch either streaming services or TV, it’s more likely to be a mix. Today people spend about 3.5 hours a day in front of the TV, the same as before covid, but at the same time streaming services are growing. This means people are stealing from their free time and consuming more and more entertainment. At some point it will hit a ceiling and then it will be a matter of managing that audience distribution as effectively as possible. Which will be my main task. Unilaterally growing Voyo by devouring Nova TV is not the desired outcome. Although we make more money from Voyo subscribers than we do from TV advertising.
Daniel Grunt (47)
A native of Litoměřice, Daniel Grunt studied economics at the University of Agriculture. He started in 2002 as the head of marketing of the Centrum.cz portal. He first worked at the largest Czech commercial television station, Nova, between 2008 and 2010, when Petr Dvořák, the then director, appointed him director of Internet services.
In the past decade, Grunt spent eight years building up the digital activities of rival Prima, before returning to Nova TV in February 2021 as head of new media at CME Group to develop the Voyo video library.
Last month, he replaced Jan Vlček and Klára Brachtlová as the CEO of Nova. The station is owned by financial group PPF again from 2020, having acquired it for CZK 48 billion in the purchase of Central Media Enterprises, along with its television companies in Slovakia, Romania, Bulgaria and Slovenia. Voyo also wants to succeed in all these countries.