Failing station to get the axe

By : Anna Kocińska

   The owners of one of Poland’s first private TV stations, RTL7, are considering selling or closing the station by early next year, the Business Journal has learned.

   Sources close to RTL Group, which owns the station, said the company is unhappy with RTL7’s limited national reach and poor ratings. Last month the station recorded a 2.2% viewer share, its lowest level since 1999, when it captured a 4% share of all TV viewers, according to AGB Polska. Sweeping format changes introduced last year have failed to revive the station.

   RTL Group, founded last year through the merger of German-Belgian media holding CLT-UFA and Pearson TV, has stakes in 22 TV stations in nine European countries, including the U.K.’s Channel 5 and France’s M6. RTL7 was launched in December 1996 by CLT-UFA. Dirk Gerkens, director general of RTL7, said last year that even though the station’s first four years in Poland had not been successful, a revamped format geared toward young Polish families would improve the station’s ratings. He said RTL7 was to invest zł. 20 million ($4.76 million) in development of local programming last year and another zł. 60 million ($14.3 million) this year. His goal was to garner a 7% audience share by the end of 2000. In March of that year, RTL7 had 3% of the market, but by December its audience share had shrunk to 2.4%. Its ratings this year have hovered between 2.1-2.7%.

   “(RTL7) is in a lousy situation,” said Marcin Bogłowski, head of the TV division at Mediacom, a Warsaw-based media planner. “According to my estimates, their ad revenues must have dropped by 40% since last year. We don’t (advertise with RTL7) anymore. With the ad market in decline, we have to focus on major stations to consolidate our clients’ budgets rather than fragment them.”

   According to Bogłowski, RTL7 was one of four major TV stations that were always included in ad budgets, but this changed shortly after TV4 entered the market last year, he said. TV4, which targets young, middle-class viewers, quickly nabbed an audience share above 3%. Its ratings improved further this summer with the launch of “Amazonki,” a reality show. Due to the success of that program, TV4’s viewer share spiked to more than 5%. “TV4 booted (RTL7) out and today we spend less than 1% of the budgets we can plan on TV stations,” Bogłowski said. “Their audience share is so low that when taking into account significant errors that the ratings usually include, it’s better to spend money with major stations whose audience shares are significantly higher.”

   But RTL7’s plunging ad revenues do not mean that everyone has written the station off. Warsaw-based Optimum Media still uses RTL7 in its media plans. “The fact that we use (RTL7) doesn’t mean we’re being forced to,” said Adrian Kawecki, head of TV planning at Optimum Media. “It all depends how you want to build reach for your client. If they can provide our clients with wealthy viewers from bigger cities, we take them because that way we can inexpensively build the kind of reach some clients want.”

   RTL7 is targeted at viewers aged 16-49 who live in cities. “And their prices are reasonable,” Kawecki said. “They know who they are – a niche TV station – so they don’t demand exorbitant prices. They’re a stable station, but if they keep lowering their prices without developing, it may lead to their insolvency. But this depends on their programming for next year.”

   Magda Kłaczyńska, production manager at RTL7, said it’s too early to reveal the station’s plans for 2002. “All I can do is talk about our current autumn lineup,” she said. “We won’t do any talk shows until the end of the year, but there are programs I can really recommend such as the documentaries “52 minutes” and “Niesamowite maszyny” (Incredible Machines),” she said. “Their reach is well above our average, up to 7-9%.”