Pay TV

PAY TV IN 2015

• 60% share in the DTH market in Poland,
• 4.5m active services, including 940 thousand Multiroom HD services.

Cyfrowy Polsat is the largest pay-TV provider in Poland and a leading satellite platform in Europe in terms of the number of customers. According to the GfK survey conducted in May 2015, Cyfrowy Polsat is the most recognizable provider of pay TV in Poland, with the spontaneous awareness ratio of 85% and aided awareness ratio of 97%.¹.

Offer of Cyfrowy Polsat:

• 179 TV channels, with diverse themes, including general, sports, movie, lifestyle, education, music, news/information and children’s channels,
• Flexible offer and broad portfolio of packages at prices from PLN 19.99 to PLN 49.99 per month,
• Multiroom HD service allowing users to view all the channels available in the package on up to 4 TV sets,
• VOD Home Video Rental based on 13 satellite channels, with over 40 films available each month,
• MOBILE TV - extended DVB-T offer: 12 encrypted television channels and 12 radio stations,
• LTE - ultra high speed mobile Internet access,
• Cyfrowy Polsat GO service – television in the set-top box, but also on the mobile phone and tablet, thousands of on-demand programs and over 80 online channels to be viewed on mobile devices (service added in March 2016).

Cyfrowy Polsat is the only operator to produce the set-top boxes on its own. This ensures control over the production process and enables the company to offer the highest quality equipment meeting the customers’ expectations. By the end of 2015, 17 different models of set-top boxes have left the production lines. In 2015 the Company introduced to the market the latest, most advanced set-top box available in the offers of satellite platforms in Poland - EVOBOX PVR.

Currently, to meet the needs of Cyfrowy Polsat we produce HD and zapper set-top boxes and a PVR set-top box with a built-in hard drive EVOBOX PVR, PVR HD 7000, HD 6000, HD 5500s, HD 5000, HD 3000, MINI HD 2000 and three models in the DVB-T standard (T-HD 1000, T-HD 210 and T-HD 200) as well as a 320 GB USB hard drive (DTU 320). Set-top boxes are produced in Cyfrowy Polsat’s factory in Mielec.

Cyfrowy Polsat has its own transmission center which enables broadcasting of television channels to our transponders on Hot Bird satellites.

The platform uses state-of-the-art MPEG-4 standard, which not only ensures more efficient use of satellite transponder capacity but more importantly guarantees transmission of signal of much better quality. As a result of the switch to the MPEG-4 standard the platform’s customers received 16 additional channels in HD standard without incurring any additional costs for the lease of satellite capacity. 

1 Survey conducted by GfK on the market of pay-TV provides in Poland, April/May 2015

Online video

ONLINE VIDEO 2015

• Over 5m downloads of the IPLA application for Android devices,
• IPLA is the most popular mobile VOD application in Poland,
• An average of 4.3m active users per month in 2015,
• Approx. 75% of total revenue generated from advertising,
• Approx. 25% of revenue generated by end users purchasing content,
• Over 20 new TV channels appeared in the IPLA offer in 2015. 

 Watch what you want. IPLA is the online video market leader in Poland offering the largest legal TV content database. It means over 70 channels and tens of thousands VOD materials including over 180 series and TV programs aired on over a few dozen TV channels. Every user will find interesting content whenever and wherever he/she wants, thanks to the applied multi-platform solution. IPLA also offers around 200 hours monthly of major sports events coverage, news, a few hundred movie titles, children content, entertainment, and education.

IPLA offers access to TV content grouped in thematic packages: IPLA SPORT, IPLA FILMY I SERIALE, IPLA DZIECI, IPLA WIEDZA I NEWS, IPLA ROZRYWKA, IPLA ELEVEN SPORTS and IPLA EXTRA, which are activated for a period of 30 or 90 days or on a one-off basis in the form of 48-hour access to selected items.

In 2015, IPLA broadcast, among others UEFA European Championships 2016 qualifying stages, widely popular KSW (Martial Arts Confrontation) contests, Polsat Boxing Night gala featuring Adamek vs Saleta, world boxing galas, Volleyball Plus League final matches, Bundesliga matches, Handball Polish Cup matches, Men’s Volleyball European Championships, Women’s Volleyball European Championships, World Grand Prix matches in HD quality, Wimbledon, Formula 1  races and many other sport events.

Users could also view new seasons of popular series, i.e. Hannibal or The Walking Dead, and previews of series from the new programming schedule of Polsat Television (in spring also TVP) and the latest offering from Polish and international film studios, among others: Ida, Lucy, Wkręceni 2, Miasto 44, Hunger Games, Millennium, Hector and Search for Happiness and A walk among the tombstones and many others. Entertainment events also attracted a considerable audience, e.g. Sopot Hit Festival, Disco under the Stars or Legends of Rock festival.

On whatever you want – IPLA content is available on PCs, tablets, laptops, smartphones smart TV sets, set-top boxes, game consoles.

• 90% of content is offered free-of-charge (with advertisements),
• IPLA offers only legal content.

In an attempt to address the needs of people with hearing disabilities, in 2015 IPLA developed the functionality of subtitles for video content and extended the library of subtitled materials by subsequent proposals from the offer of Polsat TV, available on the website www.ipla.tv. The service offers nearly 500 items with subtitles, marked with a special icon, which makes identification easier, and this figure is constantly growing.

Telecommunication

PLUS in 2015

• 10.1m active mobile telephony services, including:
• 6.5m contract services,
• 3.6m prepaid services,
• Smartphones constituted 88% of the total sale of handsets in Plus in 2015,
• 54% - share of smartphone users in Plus network in 2015.

Polkomtel, focusing its operations on the provision of telecommunication services under the Plus brand, is one of the leading telecommunication operators in terms of the contract base of provided mobile telephony and mobile broadband Internet access services. 

Offer:

Individual customers:

• Postpaid residential offer “JA+Abonement” (“I+Subscription”) is based on a monthly subscription fee which includes a specified number of minutes and other services such as text and multimedia messaging, data packages, packages of minutes and data in roaming or TV available on the handset. In 2015, the subscription fees ranged from PLN 29.99 to PLN 179.99,
•  The “JA+Mistrzowski Mix” (“I+Champion Mix”) and “Plush Mix” offers combine the characteristics of a prepaid and contract offer – the commitment to make a specified number of top-ups of specified values, which can be used for telecommunication services, including minute packages, text messages or data packages. Customers of the MIX offers can purchase additional packages of services. Values of the top-ups ranged from PLN 30 to PLN 60,
• „JA+Na Kartę” (“I+Card”) and Plush na Kartę (“Plush Card”) are prepaid offers which allow customers to gain access to the mobile network upon the purchase of a starter pack (SIM card with a fixed amount of credits to be used for mobile services).

Business customers:

• business customers are offered contract solutions, often on the basis of solicited tenders for their mobile requirements. Monthly subscription fees under the contract may provide for a subsidized handset that can be chosen from a broad selection,
• the offering comprises several monthly subscription fee options, taking into account the specific preferences of this segment. Contracts have a fixed term, which is usually 24 months.

Currently, smartphones constitute the majority of handsets sold by Plus. The share of smartphones in total number of handsets sold to Plus customers increased from 84% in the fourth quarter of 2014 to 88% in the fourth quarter of 2015 and hence the share of smartphone users increased in Plus network from 44% at the end of 2014 to ca. 54% at the end of 2015.

The majority of smartphones sold in 2015 support LTE technology for data transmission. Until recently, this was true for products of renowned producers. New brands, such as Huawei, are currently joining the race. Today an LTE handset can be bought for the proverbial one zloty with an affordable monthly commitment.

In Plus handsets are sold in two sales models. In the subsidized model, the price of equipment paid by the customer decreases as the subscription fee increases. In the installment plan model, an installment for equipment purchased by a customer is added to the monthly subscription fee. Bundled data packages, also for use in LTE technology, are now offered for all subscription levels.

International Roaming

Vodafone is Plus’ key partner in retail international roaming. While developing the scope of international roaming services, above all we focused on the activation of access to ultra high speed LTE Internet in European Union countries most willingly visited by our customers. As regards the remaining roaming services (voice calls and text messages), our priority is to expand coverage so that our customers could use these services worldwide.

Network

As at December 31, 2015, Polkomtel's 2G access network consisted of 6,749 base stations, while the 3G network consisted of 3,669 NodeB stations, a vast majority of which support the HSPA technology (including 3,269 HSPA Dual Carrier). The CDMA network included 578 base transceiver stations. As at December 31, 2015, the LTE/HSPA+ network operated by Midas Group and being developed jointly with Polkomtel, consisted of 5,170 HSPA+ base stations and 7,590 LTE base stations, 3,291 of which were stations operating in the 800 MHz frequency band.

Internet

INTERNET IN 2015

• Thanks to the regular growth of quality and coverage of the LTE network, in 2015 the mobile Internet user base was growing dynamically – in the contract model, it increased by ca. 17% year-on-year, to nearly 1.6m and in total to nearly 1.83m,
• Almost 100% of Poles live in areas covered by Plus and Cyfrowy Polsat’s Internet service, while 96.8% of them can access the LTE Internet.

More

Offer

Plus and Cyfrowy Polsat use various technologies to provide broadband Internet services: LTE, HSPA+ and HSPA+ Dual Carrier and offer Internet access via all supported technology platforms, for a single monthly fee. Today, almost 100% of Poles live in areas covered by Plus and Cyfrowy Polsat’s Internet service, while 96.8% of them can access the LTE Internet.

Dedicated mobile broadband Internet access is offered in contract tariffs. These contract plans are based on a monthly access fee and allow for a defined data transmission limit or unlimited data transmission in the LTE network. Under our contract plans, customers may purchase access devices (including dongle modems, fixed and mobile routers). In addition, our offer includes a wide array of tablets and laptops, which can be purchased in an installment plan, as well as tariffs without equipment - “SIM only”.

Sizes of packages available in the LTE Internet access offer vary from 5 to 100 GB, with monthly subscription fees. After having used up the basic data package the customer still has access to the Internet, thanks to the service Unlimited LTE. Monthly subscription fees range from PLN 19.99 for a 5 GB package in the “SIM only” model to PLN 89.99 for a package of 100 GB. The term of the contract is usually 24 months.

 “JA+Internet na Kartę” (“I+Prepaid Internet”) is a prepaid tariff plan dedicated to data transmission allowing customers to receive a data package, whose size and period of validity are determined by the value of the top-up. PLN 10 is the minimum available top-up, together with which bonuses, in the form of extra GB, are awarded. The highest top-up entitles to 36 GB. Additional services allow the use of 200 GB during the night.

Internet equipment

• We offer modems, mobile routers, fixed routers, tablets and sets with laptops for sale. A set for home Internet in ODU-IDU technology,
• Currently, the maximum data download speed in LTE available through the equipment we offer is 300 Mb/s (in 2015 it was 150 Mb/s),
• LTE tablets have excellent sales results. Until recently, this category of equipment was reserved for high-end brands and models. Today, apart from prestigious models manufactured by Samsung or Apple, we also offer cheaper, mass market models produced by LG, Huawei or Lenovo,
• All categories of equipment are sold in installment plans. An installment for the purchased equipment is added to the monthly fee for a data package each month. The offer features the possibility of dividing the product price into 24, 36 or 48 installments.

Bundled services - smartDOM

smartDOM IN 2015

• The goal of 1m customers of the smartDOM program achieved at the end of 2015,
• 17%  of the Group’s customers use bundled services, which should have a positive effect on their loyalty in the future,
• The number of RGUs owned by this group of customers amounted to 3.04m at the end of 2015,
• In smartDOM, the joint program of Plus and Cyfrowy Polsat customers can combine satellite TV, broadband LTE Internet, telephone, electricity and banking services, and make savings on each service added to their package,
• The smartDOM offer allows for extending the customer base, increasing revenues and improving satisfaction and loyalty of our customers.

Under the smartDOM program, we offer a promotion based on a simple and flexible mechanism – the second product is available for half the price and the price of the third product starts from even PLN 1, thanks to which every customer may create an optimum set for his or her family. The promotion is available both for new and existing customers and is valid throughout the entire term of the contract.

smartFIRMA (smartCOMPANY) is a corresponding program addressed to business customers. It allows customers to combine mobile telephony, LTE Internet, and fixed-line voice services. The program also includes Plus Bank products, electric energy from Plus, as well as a wide portfolio of supplementary services which support and enhance business.

A new edition of the program – smartFIRMA 2 was launched in October 2015 and offers new categories of services. It includes a completely new fixed-line telephony offer. New products and services can be added to the package at any time during the duration of the program. Our business customers can choose up to 6 products, 5 of which are subject to discounts. The first product is always mobile telephony or LTE Internet access. A 50% discount is offered on the second and third products. Two additional mobile telephony SIM cards can be purchased with rebates of PLN 10 and PLN 20, respectively. Furthermore, customers who run sole proprietorship businesses can purchase Cyfrowy Polsat’s satellite TV as private persons for the home. In order to profit from our attractive fixed-line telephony offer, it is sufficient to own one other product.

Famous actors, Joanna Brodzik and Paweł Wilczak are the faces of the smartDOM advertising campaign and have been involved in advertising of the Group’s bundled services from the very beginning. On October 12, 2015, during an official gala of one of the most important competitions in the advertising sector – Effie Awards – Polsat Group received an award for the smartDOM program. The silver award in the Telecommunications category for the joint campaign „Saving by adding” was received by Cyfrowy Polsat and Plus.

TV production and broadcasting

TV PRODUCTION AND BROADCASTING IN 2015

• In 2015, the main channel Polsat, thematic channels of the Group and the entire Polsat Group were leaders in the commercial group with 13.2%, 11.4%, and 24.6% audience share, respectively,
• Revenue of Polsat TV Group from advertising and sponsoring grew in 2015 nearly twice as fast (8.6%) as the entire market (4.6%) and amounted to PLN 1.04bn, which gave the Group 26%  share in the TV advertising market,
• We expect  that the TV advertising and sponsoring market will grow at the average, single digit level in 2016.

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Scheduling

We tailor our programs and programming schedules to the interests of the viewership group, which we believe is most attractive to advertisers due to its demographic characteristics. Polsat’s results in 2015 were driven, among others, by hit entertainment shows, such as:

•          Dancing with the Stars – last year the best episode of this show attracted nearly 3.8m viewers,
•          The format Your Face Sounds Familiar, in which Polish stars play the roles of Polish and world music icons – the best episode in 2015 attracted 2.9m viewers with the audience share in the commercial group at the level of 24.3%,
•          Our New House – the most popular episode in 2015 attracted nearly 3.2m viewers, which translated into an audience share of 24.6% in the commercial group,
•          Polsat SuperHIT Festival 2015 – Sopot Hit Cabaret attracted nearly 3.3m viewers, which gave  a 28.1% audience share (SHR) in the commercial group,
•           TV series First Love – is watched by nearly 2.1m viewers, on average, and the most popular episode in 2015 attracted 2,6m viewers.

The outstanding results of the channel were also driven by other leading productions: Hell's Kitchen, TOP CHEF, Must be the music, as well as the TV series Przyjaciółki and Świat według Kiepskich and Mega Hit movie slots.

Sports

As in the previous years, in 2015 Polsat also focused on sport. UEFA European Championships 2016 qualifiers are a good example. The last two matches of the Polish national football team in the EURO 2016 qualifying stage had very high viewership results. Over 7.6m viewers watched the match Scotland vs. Poland in Polsat and Polsat Sport, and a record-breaking 10.3m viewers watched the last match in the EURO 2016 qualifying stage: Poland vs. Ireland (data for Polsat and Polsat Sport). A very committed Polish national team defeated the Irish team at the National Stadium in Warsaw 2:1 following the goals scored by Grzegorz Krychowiak and Robert Lewandowski.

Key sports licenses purchased by the Group include the rights to the matches of FIVB Volleyball (World League until 2014, World Grand Prix, World Cup) and Infront/CEV (European championships in volleyball), as well as Polish Volleyball Federation (World League from 2015, Wagner’s Memorial, matches of the national team played in Poland) . Once we have obtained the required licenses for certain sports events, we provide our viewers with locally‑customized programming in the form of complete productions accompanied by the commentary of Polish journalists, as well was studios dedicated to specific events. In 2013 we acquired exclusive broadcasting rights, on all fields of exploitation,  to matches at the qualifying stage to European football championships in 2016, as well as to  matches of the European football championships in 2016. We also acquired broadcasting rights to matches of the qualifying stage to World football championships in 2018 in Russia. Furthermore, since 2010 we hold broadcasting rights purchased from the Polish Professional Volleyball League to Plus League and Orlen League matches. In 2014 we extended this contract for another five seasons 2015-2020.

 Polish productions in the Polsat TV channels

Polish productions constitute approx. 60% of programming content in our channels. Commissioned programs are sub-contracted when necessary to third-party production companies, in order to provide us with additional production capacity. Our external producers include approximately 30 Polish and foreign producers such as ATM Group S.A., Akson Studio Sp. z o.o., Tako Media Sp. z o.o., Constantin Entertainment Polska Sp. z o.o., Rochstar Sp. z o.o., Endemol Polska Sp. z o.o., Baltmedia Sp. z o.o. and Jake Vision Sp. z o.o.To provide content for Polsat Play and Polsat Café, we use the services of smaller local production companies. Polsat News relies mainly on its own production resources, while sports channels - on acquired transmissions licenses supported by strong in-house production.

In most cases, we base on production contracts. When the production of TV programs is commissioned to external producers, the contracts generally provide that the producer transfers all the copyrights and related intellectual property rights of the covered programs to TV Polsat. The producers’ fees include production fees, as well as fees for the transfer of copyrights, related intellectual property rights to the program (or, alternatively, for granting the license) and for granted authorizations and consents. All production agreements have definite terms, typically covering the time of production with the possibility of extensions.

Programs produced in-house by TV Polsat include sports, information and reporters’ programs, as well as special events.

Sources of foreign programming

We purchase programming licenses from foreign providers primarily for films, series, and sports. Our key partners for movie and series licenses are major US movie studios, such as Sony Pictures TV International, 20th Century Fox TV, The Walt Disney Company, Warner Bros International TV Distribution, CBS Studios. We also cooperate with Monolith Films. 

Sale of advertising and sponsoring

Biuro Reklamy Polsat Media is responsible for the sale of advertising and sponsoring (sale of advertising time for 22 of our TV channels and 29 other broadcasters outside our Group). In 2015, Polsat Media received, for the second time in a row, the highest total score for cooperation in the ranking of TV advertising sales offices in a report prepared by Millward Brown, commissioned by Media&Marketing Polska. In this year’s report Polsat Media obtained the highest scores in 4 out of 8 fields of the study: “General assessment of cooperation”, “they provide a rapid and exhaustive answer to a brief”, “I trust them – they give me a sense of security” and “they operate flexibly and efficiently in situation when changes take place during a campaign”. 

Technology and infrastructure:

• four digital TV studios: A, B, C and D, all of them equipped with cutting-edge, or recently modernized, equipment,
• five fully digital outside broadcast vans, including four modern HD vans and a small SD van for the rapid production of short programs,
• a two-camera Slow Motion HD van for replays during sports events,
• 13 digital satellite news gathering trucks ensuring on-site signal feed, five of which are HD-capable,
• a multi‑channel automatic TV broadcasting system for broadcasting sixteen Polsat channels,
• a multiplex system ensuring the effective transmission of the signal to viewers,
• a digital switching system for TV signals in the hub,
• IT networks designed to handle technological tasks,
• HD editing systems connected via IT and SDI networks,
• more than 80 HD cameras for reporters, with recording on SxS memory cards, together with the necessary equipment and accessories,
• digital program archive with a modern MAM system for content management,
• technological systems for signal exchange between head office and regional offices, and
• a twin-engine EC-135 helicopter with a gyro-stabilized camera, used for the production of programs and offering the possibility transmitting HD signal up to 100 km.