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According to PMR data, the Polish pay-TV market was worth PLN 6.2 billion in 2019. This represents a 1% year-on-year increase. The next few years will bring a continuation of the increase in the number of IPTV subscribers and a parallel downward trend pertaining to cable networks and satellite platforms. Against a background of a slightly weaker ARPU figure in comparison with previous years, this will cause market value to fall during the forecast period (CAGR 2020-2025: -1%).
The situation on the pay-TV market in Poland
In the last three years, the situation on the pay-TV market in Poland has been stable, with a slight indication of growth. In 2019 alone, the market was worth PLN 6.2 billion, growing by less than 1% year on year. The still relatively healthy condition of the market, given the threshold conditions of service saturation and strong competition between pay-TV providers, is a consequence of the stabilisation of the subscriber base. Last year this was reduced slightly because of the deepening outflow of subscribers in the subgroup of satellite platforms, which have been increasingly exposed to customer losses. At the same time, the number of IPTV subscribers, which exceeded one million last year, is growing steadily. The fact that the IPTV offer is, to some extent, able to attract entirely new customers for the pay-TV market secures this market against more substantial reductions.
In addition, the key trend pertaining to the value of the market remains the fact that operators are no longer competing for customer attention mainly in terms of price (one of the lowest ARPU figures in Europe), but with the content and quality of the content offered to them. This shows the high level of market maturity.
Market trends: cord-cutting
Despite the current relatively stable situation on the pay-TV market in Poland, it is simultaneously under pressure from sensitive TV viewers and their tendency to cord-cut. The outflow of customers from pay-TV is obvious, but the scale of the phenomenon is relatively insignificant, even taking the development of VOD services, which are still, and which will remain, complementary in most cases, into account. PMR’s estimates suggest that between 2012 and 2019, the total number of actual cancellations of satellite or cable TV subscriptions in Poland exceeded 2 million households (with an average annual churn rate of 3%). However, it should be borne in mind that part of this base has, meanwhile, returned to pay-TV subscriptions or has just started using this service. Some have also migrated to the IPTV standard – with approximately 20% of households, on average, abandoning satellite or cable each year.
Forecasts for the pay-TV market
PMR’s quantitative forecasts for the pay-TV market for 2020-2025 envisage further stabilisation of the market, made possible by continued growth in the number of IPTV subscribers. The subscriber base of cable TV (principally the analogue subdivision), and satellite TV in particular, will be reduced. With a slightly weaker ARPU figure in comparison with those of previous years, market value is expected to fall during the forecast period (CAGR 2020-2025: -1%).
Impact of the COVID-19 epidemic on the pay-TV market
According to PMR, the COVID-19 pandemic has brought some benefits to the market. The lockdown has turned out to be a phenomenon which has, to some extent, consolidated the use of pay-TV among Polish people, and could, at least temporarily, stop the cord-cutting trend on the Polish market. Free channels made available as part of the so-called “open windows” during the epidemic could also play a role. Some subscribers, encouraged by this content, will, in order to keep it longer, decide to buy superior TV packages or additional channel packages. On the other hand, some vulnerable customers will, in a disadvantaged economic environment, stop buying additional pay-TV services or even give up their subscriptions completely. Because of the constraints placed by the epidemic on all sporting events, demand for premium sports channels will also wane.
These factors will have an impact on the market in the short term, particularly in 2020. According to PMR, in the long term, the COVID-19 crisis will result in additional demand for pay-TV and broadband service packages via cable network offers and fibre and IPTV providers. The epidemic has clearly shown that high speed, stable internet is one of the critical services for a household, and demand for higher speeds will, therefore, increase. PMR believes that customers of digital platforms may migrate to cable and fibre optic networks for this purpose, and that this will, in an era of convergence of services, also force a change of pay-TV provider. Indeed, satellite platforms may offer a bundled television service with a less stable mobile link.
PMR predicts that, given these conditions, DTH providers will opt for a more aggressive pricing policy to mitigate the extensive customer loss. In the adopted forecasts, this will lead to a reduction in the ARPU figure pertaining to the service and, as a result, reductions in revenue for digital platform providers. Between 2020 and 2025 DTH providers will lose about 800,000 customers in total. This will, excluding analogue cable TV, be practically the only pay-TV subgroup which will see systematic year-on-year reductions.