Fees, competition could hamper TVN 24's success

TVN 24, the nation's first 24-hour news TV channel, took a big step toward increasing its audience reach last month by signing a deal with cable operator TVK Multimedia Polska (TVKM). But industry insiders last week were skeptical whether the deal would lead to further agreements with other operators, saying the channel's subscriber fees are too high. They also warned of competition posed by a new, free information channel, Telewizja Polska's TVP3, set to air Jan. 28.

Under the agreement with TVKM, TVN 24, a satellite and cable TV channel, will be available to TVKM's 400,000 subscribers. Michał Broniatowski, vice president of ITI Group, owner of TVN 24 and TVN, a private broadcaster, was optimistic that other deals with cable operators would be in the offing. "(The deal with TVKM) is a breakthrough," he said.

The agreement with TVKM is TVN 24's first with a cable operator since the channel's launch last August. After a three-month, free-trial broadcast, the channel failed to sign agreements with any of the top cable networks, seriously curtailing its chances of attracting advertisers because its reach was limited, market observers said.

Until the deal with TVK Multimedia was signed, TVN 24 was available on Cyfra+ and Wizja TV, Poland's top two digital platforms, and in a number of cable networks, though the channel declined to specify which ones.

Not in the business plan

Problems with TVN 24's distribution started to surface after Aster City cable network, the No. 1 cable operator in Warsaw, refused to include the news channel in its package of programs after the channel's trial period ended in November. While TVN 24 said that according to surveys it was the most popular program in the Aster City network, the cable company decided that TVN 24's fee of $0.20 per household per month was too expensive without raising subscription rates.

That fee has also been a bone of contention with other leading cable operators, which according to unofficial information are willing to pay no more than $0.10 per household per month.

"While the price they're demanding puts them among the most expensive channels such as Eurosport ($0.31 per household) or the Discovery Channel, TVN 24 is a completely different kind of channel; nobody has analyzed their audience share yet," said Aleksander Sawicki, spokesman for the National Chamber of Cable Communication (OIGKK), which represents the top cable networks in Poland. "It's true that TVN 24 turned out to be a very popular channel at Aster City, but Aster City didn't include it into its offer anyway. That's significant. And let's face it, they were lucky to be on the air when the Sept. 11 terrorist attacks happened. But a survey conducted now could bring very different results."

Nevertheless, TVKM, also a member of OIGKK, reached an agreement with TVN 24. "It's true they weren't waiting for the chamber to reach an agreement with TVN24, but that's easy to explain," Sawicki said. "TVKM increased the subscription fee in its networks and had to offer something in return to subscribers. TVN 24 was meant to be that reward. Secondly, TVKM merged with Gdynia-based Szelsat in April last year, and both the increase and the acquisition of the new channel were explainable in the context of the merger's reorganization."

Whatever the case with TVKM, most cable operators are wary of increasing subscription fees, Sawicki said. "On the other hand, every pay channel included in a package of programs increases the costs of a network of which most subscribers have no idea," he said. "And they also have to pay multiple artists' royalty fees, and the appetites of copyright agencies representing filmmakers and writers are insatiable."

Tough terms

Sawicki also said that TVN 24's demand for five-year contracts was unacceptable to cable operators. "It's a very long period of time if you remember that TVP might at any time launch its own news channel, which according to law would be a must-carry channel for cable operators," he said. "Is there room for two news channels of which one is free and the other isn't?"

According to a source at TVP, its new information channel, TVP3, will be based on the existing 16 regional programs and be officially launched in March, though its trial broadcast will begin Jan. 28. "But don't confuse (TVP3) with TVN24, which is a CNN-like channel," the source said. "TVP3 will be focused above all on regional news. It will also cover Sejm meetings and local government." TVP3 will be available via terrestrial broadcasting and cable networks.

Meanwhile, OIGKK, which represents the 80 largest of Poland's 600 cable networks, hasn't scheduled the next round of negotiations with TVN 24 yet. Talks held in Mikolajki in November failed. Dorota Zawadzka, spokeswoman for UPC Polska, owner of UPC TVK, said last week that no progress had been made in negotiations with TVN 24.

Anna Kocinska