TV council, Canal+ headed for showdown
"For now, we prefer to think that the move was just an invitation to more decisive talks concerning the legal status of operations of some of Canal+'s competitors," said Andrzej Zarebski, a member of the KRRiTV's managing board. "Otherwise we will have to initiate proceedings, which could end in taking the station's license away."
But that may be exactly what Poland's largest pay-television station wants. This would free Canal+ from a legal obligation to finance programming, which its direct competitors are not incurring, and possibly pressure Sejm deputies to speed up revisions to the broadcast law.
Over the past three years, Canal+ Polska has invested more than $7 million in Polish programming, including $3.6 million last year, which helped to co-finance some of Poland's best-known box office titles such as the blockbuster "Kiler." This year, the station plans to invest $4 million, which will help to finance films such as "Kiler's" sequel and Poland's largest-ever production, "Pan Tadeusz."
Although this is a minor cost compared with Canal+'s revenue of at least zl. 135 million ($39 million), based on subscriber fees, it is still one that its competitors don't pay.
"The decision (to stop financing Polish production) is an outcome of the analysis of the current television market, which allows unfair competition, with Canal+ being its victim," the company said in a July 24 statement announcing that it would stop financing programming production.
Currently, Canal+ Polska's most direct competitor, HBO, does not have a Polish broadcasting license. It beams its signal into Poland from a site in Hungary, operating under a local telecom license and the Convention on Trans-Border Broadcasting.
And this September, Canal+ will face competition from Wizja TV when it launches its digital platform. Wizja, which also does not have a broadcasting license, will beam its signal in from the U.K.
Neither HBO's broadcasting from Hungary, nor Wizja which uplinks its platform from U.K., has ever applied for a broadcasting license here.
"They did not have to," said Zarebski. "But that does not change the fact that their legal status is ambiguous."
Canal+ has sued HBO, saying its de-located broadcasting is illegal, but the Polish courts have yet to decide on the issue. The French-owned company has now said it is likely to beam its own digital platform from Sweden. But because it has a broadcast license here, it will still have to abide by the requirements that accompany the license.
"Canal+ already has a license, including quite harsh quotas concerning the amount of Polish programming allowed and investments in local production, which they are very careful to follow," Zarebski said. "The fact that they decided to uplink from Sweden does not change much in this respect, as long as their license is still binding."
But if Canal+ were to break the terms of the license and lose it, these requirements would not apply.
And this, media players said, could well be Canal+'s intention.
"Maybe, they finally realized that it's much cheaper to uplink from abroad, as well as that Poland's broadcasting law is so archaic that it does not take into account de-located broadcasters," said one media executive who did not wish to be named.
Bogudar Kordasiewicz, a media lawyer with Hogan & Hartson, said Canal+ could be playing a game of chicken with the regulatory agency, but added that it might have other intentions.
"Somehow, I don't think they would go to all that fuss with KRRiTV, when they could simply close the business now and start broadcasting from Sweden," he said. "So what I actually think this is all about, is publicity and raising a public outcry that national culture is threatened, giving Canal+ a pretty strong argument in its fight with de-located broadcasters."
And financing programming is not the only requirement Canal+ faces under its broadcasting license. The station must also present a minimum of 40% original Polish programming. It is banned from selling commercials during regular programming time and allowed to sell spots only during a 3.5 hour window every 24 hours.
In addition, Canal+ had to pay zl. 3.35 million ($970,000) for a terrestrial license and zl. 3.1 million ($900,000) for satellite broadcasting.
"While they have already paid for their licenses, from a business point of view, they could indeed think that obligatory investments in Polish production and limitations concerning advertising are unjust," said Kordasiewicz. "But again, why would they provoke the council to take their license away, knowing that KRRiTV is everything but fast to make up its mind, if they could do that themselves?"
The KRRiTV said that while it may understand Canal+'s reasons for being unhappy with the way broadcasting law was being applied, it could not stand by idly while it reneged on its license requirements.
"We just hope we will reach some kind of agreement, and we will not have to consider taking their license back," Zarebski said.
And the KRRiTV also hopes the Sejm's Media and Broadcasting Committee will notice that the media market is in the middle of a revolution with two digital broadcasters launching this fall. The committee is currently discussing new radio and television legislation, but progress has been slow.
"It's pretty obvious that the attempt to regulate the media market by way of licensing is not working," Kordasiewicz said. And while domestic regulation seems to be failing to address that issue, the industry should hope that the Convention on Trans-Border Broadcasting will soon be amended, so that it bans broadcasting targeted only at one market from anywhere else but the market itself, he added.
Currently, the KRRiTV is lobbying the Sejm to introduce legislation that would make it more attractive for companies to directly invest here, despite programming obligations. The KRRiTV has suggested that the Sejm's committee to increase the maximum foreign ownership in a media company to 49% from the current 33%. The committee has so far rejected the proposal, though.
"They seem not to see that we're facing major changes here, and some changes such as the increase of the foreign investment quota could encourage foreign investors to invest here, instead of putting their money somewhere else and just exploiting the Polish market," Zarebski said.
But that may be exactly what Poland's largest pay-television station wants. This would free Canal+ from a legal obligation to finance programming, which its direct competitors are not incurring, and possibly pressure Sejm deputies to speed up revisions to the broadcast law.
Over the past three years, Canal+ Polska has invested more than $7 million in Polish programming, including $3.6 million last year, which helped to co-finance some of Poland's best-known box office titles such as the blockbuster "Kiler." This year, the station plans to invest $4 million, which will help to finance films such as "Kiler's" sequel and Poland's largest-ever production, "Pan Tadeusz."
Although this is a minor cost compared with Canal+'s revenue of at least zl. 135 million ($39 million), based on subscriber fees, it is still one that its competitors don't pay.
"The decision (to stop financing Polish production) is an outcome of the analysis of the current television market, which allows unfair competition, with Canal+ being its victim," the company said in a July 24 statement announcing that it would stop financing programming production.
Currently, Canal+ Polska's most direct competitor, HBO, does not have a Polish broadcasting license. It beams its signal into Poland from a site in Hungary, operating under a local telecom license and the Convention on Trans-Border Broadcasting.
And this September, Canal+ will face competition from Wizja TV when it launches its digital platform. Wizja, which also does not have a broadcasting license, will beam its signal in from the U.K.
Neither HBO's broadcasting from Hungary, nor Wizja which uplinks its platform from U.K., has ever applied for a broadcasting license here.
"They did not have to," said Zarebski. "But that does not change the fact that their legal status is ambiguous."
Canal+ has sued HBO, saying its de-located broadcasting is illegal, but the Polish courts have yet to decide on the issue. The French-owned company has now said it is likely to beam its own digital platform from Sweden. But because it has a broadcast license here, it will still have to abide by the requirements that accompany the license.
"Canal+ already has a license, including quite harsh quotas concerning the amount of Polish programming allowed and investments in local production, which they are very careful to follow," Zarebski said. "The fact that they decided to uplink from Sweden does not change much in this respect, as long as their license is still binding."
But if Canal+ were to break the terms of the license and lose it, these requirements would not apply.
And this, media players said, could well be Canal+'s intention.
"Maybe, they finally realized that it's much cheaper to uplink from abroad, as well as that Poland's broadcasting law is so archaic that it does not take into account de-located broadcasters," said one media executive who did not wish to be named.
Bogudar Kordasiewicz, a media lawyer with Hogan & Hartson, said Canal+ could be playing a game of chicken with the regulatory agency, but added that it might have other intentions.
"Somehow, I don't think they would go to all that fuss with KRRiTV, when they could simply close the business now and start broadcasting from Sweden," he said. "So what I actually think this is all about, is publicity and raising a public outcry that national culture is threatened, giving Canal+ a pretty strong argument in its fight with de-located broadcasters."
And financing programming is not the only requirement Canal+ faces under its broadcasting license. The station must also present a minimum of 40% original Polish programming. It is banned from selling commercials during regular programming time and allowed to sell spots only during a 3.5 hour window every 24 hours.
In addition, Canal+ had to pay zl. 3.35 million ($970,000) for a terrestrial license and zl. 3.1 million ($900,000) for satellite broadcasting.
"While they have already paid for their licenses, from a business point of view, they could indeed think that obligatory investments in Polish production and limitations concerning advertising are unjust," said Kordasiewicz. "But again, why would they provoke the council to take their license away, knowing that KRRiTV is everything but fast to make up its mind, if they could do that themselves?"
The KRRiTV said that while it may understand Canal+'s reasons for being unhappy with the way broadcasting law was being applied, it could not stand by idly while it reneged on its license requirements.
"We just hope we will reach some kind of agreement, and we will not have to consider taking their license back," Zarebski said.
And the KRRiTV also hopes the Sejm's Media and Broadcasting Committee will notice that the media market is in the middle of a revolution with two digital broadcasters launching this fall. The committee is currently discussing new radio and television legislation, but progress has been slow.
"It's pretty obvious that the attempt to regulate the media market by way of licensing is not working," Kordasiewicz said. And while domestic regulation seems to be failing to address that issue, the industry should hope that the Convention on Trans-Border Broadcasting will soon be amended, so that it bans broadcasting targeted only at one market from anywhere else but the market itself, he added.
Currently, the KRRiTV is lobbying the Sejm to introduce legislation that would make it more attractive for companies to directly invest here, despite programming obligations. The KRRiTV has suggested that the Sejm's committee to increase the maximum foreign ownership in a media company to 49% from the current 33%. The committee has so far rejected the proposal, though.
"They seem not to see that we're facing major changes here, and some changes such as the increase of the foreign investment quota could encourage foreign investors to invest here, instead of putting their money somewhere else and just exploiting the Polish market," Zarebski said.
