TV broadcasting market MARKET ENVIRONMENT The Polish TV market comprises the public broadcaster and several local and nationwide commercial broadcasters. The history of Polish TV dates back to the 1950s. Telewizja Polska, the public broadcaster, was the first and – until 1992 – the only TV company in Poland. However, following the political transformation the market was opened to commercial competitors. In Poland, there are currently five nationwide and interregional terrestrial broadcasters, several regional televisions operating through cable and satellite networks, as well as several broadcasters offering Polish editions of international channels and channels in the original language versions. The broadcasting technology in Poland is being changed from analog to Digital Video Broadcasting‐ Terrestrial (DVB‐T). This change will result in greatly improved sound and image quality, while making it possible to: broadcast more channels eliminate signal interferences occurring during analog broadcasting. The process of turning off analog transmitters is divided into stages, and the complete switchover is scheduled for the end of July 2013. To obtain a license, broadcasters have to comply with licensing requirements concerning the content of their channels, which is regulated by law, as well as their corporate ownership structure. In addition, substantial expenditure is required in order to ensure the necessary infrastructure, purchase a programme library, secure the proper distribution of programmes and assemble a professional team responsible for sales of advertising airtime. The competitive market and legal requirements make for high barriers to entry, which are difficult to overcome in a short time by new players. Polish TV advertising market According to estimates made by the ZenithOptimedia agency in June 2012, in 2011 Polish advertising spending was the third largest in Central and Eastern Europe (after Russia and Turkey), having exceeded PLN 7.1bn (after discounts), up by 2.0% year on year. The TV advertising market is worth nearly PLN 3.7bn, up by 1.5% relative to 2010. Based on Zenith’s data, we estimate that TV advertising in Poland will have a 0.6% CAGR between 2011 and 2014. In 2011, the television continued to be the dominating advertising channel, accounting for 50% (2007) to 52% (2011) of the total amount spent on advertising. According to ZenithOptimedia, the figure will remain relatively flat in the years to come. TV advertising has not been affected by the significant expansion of Internet advertising, as lower spending has been recorded in the printed media segment. COMPETITION The Polish TV market is dominated by four major terrestrial broadcasters: TVP1, TVP2, TVN and POLSAT. In 2011, they held in total a 58% share of the audience in the commercial group. With each passing year, cable and satellite TV becomes more and more popular, which translates into an increasingly fragmented TV market. In 2011, POLSAT’s main competitor, TVN, had a 16.1% daily audience share. The station’s average annual broadcast coverage was 92% of all households. Launched in 1997, TVN belongs to the TVN Group, controlled by ITI. In 2011, thematic channels offered by the TVN Group had a 5.9% daily audience share. The TVP Group comprises nine stations, including two nationwide stations – TVP1 and TVP2. The TVP Group is one of the major players on the Polish advertising market. In 2011, its key channels won 13.6% (TVP1) and 11.9% (TVP2) of daily audience share. The broadcast coverage of both stations is 100%. TVP’s thematic channels had a 3.9% audience share. Apart from advertising revenue, TVP as the public broadcaster collects additional revenue from television licenses payable by all TV users pursuant to the Television Licensing Act. Even though there are restrictions in place forbidding TVP to interrupt programmes with commercials, which materially limits the station’s resources, revenue from television licenses represented only 12% of TVP’s total revenue in 2011. .