TVP plans to move ahead on digital TV

"We're still going to sign the deal," Witold Knychalski, chairman of TVP's supervisory board told the Business Journal last Friday. "It's the only direction we can take."
The station's drive to join the digital platform, to be created together with Canal+, private television station Polsat and cable operator AsterCity, was put on hold earlier last week when Treasury Minister Emil Wasacz refused to approve an amendment to TVP's articles of incorporation. The planned amendment would have let the station "create and broadcast thematic channels as well as use the company's sources beyond current operations."
The clause was designed to open the door for TVP's move into digital broadcasting within the PPC.
"These were to be the assets (thematic channels) that we would incorporate into the platform," Pawel Sosnowski, head of the station's information bureau, said last Friday.
But TVP said that despite the Treasury Ministry's blocking move, it still has room to maneuver.
"From our understanding of the media law and our own charter, we can still sign any contract concerning a consortium we want to form with Canal+," Sosnowski said.
TVP and its supervisory board believe that while the ministry can block the creation of new channels, it can't stop the station from signing commercial deals. Such arrangements only need the approval of the supervisory board and the National Radio and Television Council (KRRiTV).
Lew Rywin, president of Canal+ Polska, said last week that his station expects TVP to go ahead with the PCC deal, possibly as early as this week.
"(The ministry's vote) is strictly a political decision that has nothing to do with (TVP's) real situation," he added. "If the Treasury Minister is making such a decision, he's causing harm to his own station."
The station's intention to go forward with the PPC could bring it into a direct confrontation with its shareholder. For the moment, though, the ministry is not saying it wants to kill TVP's expansion, just put it on hold for a while.
"We just question the investment into a business that does not guarantee profitability," Andrzej Sankowski, the Treasury Ministry's adviser on media affairs, told the Business Journal. "The company has lots of current issues which are much more pressing."
Among the issues that the ministry finds more important than risky digital technology is making sure TVP stops ignoring a late-July resolution passed by the ministry directing the company to forward it zl. 27 million ($7.5 million) from its 1997 profit of zl. 100.06 million ($27.8 million).
The amount asked for by the ministry, which was not planned in the station's budgets, breaks down into zl. 17 million ($4.7 million) for the Assistance to Poles in the East (PPnW) foundation and zl. 10 million ($2.7 million) for Polish cinematography.
"We made a profit of zl. 100 million, and then the ministry comes here and says it wants to take away more than a quarter from it," TVP's Sosnowski said. "We did not plan it, and as far as we are concerned that could result in serious problems with our cash flow."
The public broadcaster, which has more than 6,500 employees, reported 1997 revenue of zl. 1.28 billion ($355 million), with zl. 435.88 ($121.07 million) coming from subscription fees and zl. 748.02 million ($207.8 million) from advertising.
Industry sources close to the company and ministry said last week that TVP's owner is afraid of the broadcaster becoming involved in digital television at too early a stage. The ministry believes that it is not yet clear if digital broadcasting will work in Poland or if the market can support two digital platforms. Wizja TV, owned by U.S.-based @Entertainment, launched a digital platform in September.
"It's an educated guess that (any digital platform) will not be profitable for the first 10 years," said a source close to the ministry. "No one, and I repeat no one, should risk public money in a project that may fall through."
Given that @Entertainment is already operating on the market with 40,000 subscribers makes it far too risky to invest in a competing platform, the source said.
But TVP is of a completely different mindset on the issue, arguing that it must become involved when the market is just developing.
"It's not logical," TVP's Knychalski said of the ministry's position. "Catching up with the rest of the world, and offering a wider choice to our viewers is precisely what we should do as a public broadcaster.
"And we would not risk anybody's money," he added. "We are going with experienced broadcasters, having the necessary know-how and broadcasting from Poland."