UPC to close down flagship TV channel
Wizja TV's digital flagship channel, Wizja 1, will close down at the end of March because of cost-cutting in the region, according to owner Netherlands-based United Pan-Europe Communications (UPC).
Nimrod Kovacs, UPC's executive chairman of Central European operations, said the channel was too costly to run. "Although it's a good service, Wizja 1 is extremely expensive," he said. "We tried to figure out how to make it less expensive, but it can't be done."
Last week, workers at the channel were given two-months' notice.
Wizja 1 will be replaced with less expensive channels, Kovacs said. "But more of them, so from a consumer's point of view, it's better value."
UPC's Toon Diegenant said that the main reason for the change was to offer viewers a maximum variety of programs. "Our programming strategy is to offer more choice to viewers and we felt we could spend the money more wisely," he said. "We expect that revenues from subscriptions will even go up thanks to our new offer."
But analysts have questioned UPC's statements saying the company is simply scaling back its investments. "They want to cut back on capital expenditure from e250 million per month in 2000 to a monthly e150 million in 2001," said Jeroen Bos, an analyst with Fortis Bank Nederland. "The goal is to scale back capital expenditure in Central and Eastern Europe. This could have something to do with closing down the Wizja 1 channel."
In a recent report, UPC said its financing strategy for 2001 will limit monthly cash burn by rationalizing investments. The channel's yearly production costs reportedly amount to several million dollars, a result of programs being produced partly outside of Poland.
According to Dorota Zawadzka, the director of public relations at UPC in Poland, Wizja 1 was produced in Poland and the U.K. The channel's owner, Wizja TV, transmits via Astra satellite from the company's broadcasting center in Maidstone, U.K.
Industry sources said it's no longer a good time for local Polish channels at UPC and that the company wants to internationalize its channels for a broader audience.
While UPC does produce its own channels (through its UPCtv brand) that could now replace Wizja 1, costs associated with such channels are usually too high to be handled by one company. That's why UPC is talking with several other channel holders and will announce the introduction of new channels to replace Wizja 1 soon, Diegenant said. So far, Wizja TV has produced programs in a joint-venture with Zone Vision (TV production company), which produced channels such as Romantica (romance movie channel) and Le Cinema.
Meanwhile, UPC confirmed that Wizja Sport will not be axed. Kovacs said the sports channel still fits in with UPC's long-term programming strategy. "We are enhancing sport," he said.
Wizja 1's 30 employees (some of whom may be transferred to company subsidiaries elsewhere) will all receive severance packages, Diegenant said. "We want to compensate people as much as possible. We want to be loyal to them as they were loyal to us."
UPC acquired Wizja TV, together with PTK cable TV network in 1999 after it bought Poland-based @Entertainment. Wizja TV was launched in 1998 as Poland's first digital satellite platform. Its line-up included: National Geographic, Travel, QuesTV and Animal Planet, as well as movie channels HBO, Hallmark, Romantica and TCM. Out of 18 channels, 16 were in Polish. But apart from dubbed international channels, it offered two Polish channels, Wizja 1, a comedy and entertainment channel, and Wizja Sport, which was introduced in September 1999.
