Cyfrowy Polsat contract pay TV RGUs down 147,000 YoY in Q1

Wednesday, May 22nd, 2024 
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WARSAW — Cyfrowy Polsat S.A. Capital Group has released interim condensed consolidated financial statements for the 3 months ended 31 March 2024.

Pay TV

Pay TV services are offered under the ‘Polsat Box’ brand by Cyfrowy Polsat – the largest pay TV provider in Poland – and our subsidiary Netia. We offer our customers access to over 160 TV channels broadcast in satellite, terrestrial and Internet (IPTV, OTT) technologies as well as modern OTT services and Multiroom. We also provide online video services through online services ‘Polsat Box Go’, the leader on Poland’s online video market.

Cyfrowy Polsat Pay TV RGUs - 1Q 2018-1Q 2024

The number of contract services for B2C customers provided by us at the end of the first quarter 2024 amounted to 13,077 thousand RGUs, i.e., 86 thousand less compared to the previous year (-0.7% YoY). The main reason for this decline was the decrease in the number of contract pay TV services by 147 thousand (-3.0% YoY) to the level of 4,804 thousand RGUs. The key drivers of this decline include a lower number of provided satellite TV services and the price repositioning and change in the strategy of offering our video online services (in 2021, we replaced the Ipla platform with the Polsat Box Go offer, which is differently positioned in terms of pricing). This decrease was partially offset by an increasing number of TV services offered in online technologies (IPTV/OTT).

The number of prepaid pay TV services increased by 2 thousand (+1.7% YoY). The prepaid pay TV RGU base has been adjusted to exclude the promotional package Polsat Box Go Start offered at PLN 30 per year, which was launched in the third quarter of 2023 in connection with the decision to discontinue the ad-based service Polsat Go.

Pay TV RGUs (thousands):

                      for the 3-month period
                              ended March 31         change / %
                      ----------------------  -----------------
                            2024        2023  nominal  % / p.p.
                      ----------  ----------  -------  --------
B2C contract services      4,804       4,951    (147)    (3.0%)
Prepaid services             123         121        2      1.7%

Situation on the pay TV market in Poland

Our revenue depends on the number of our customers and their loyalty, the pricing of our services and the penetration rate of pay TV in Poland, which we consider to be a saturated market. The high level of competition and the dynamically evolving market environment (including consolidation processes on the cable TV market as well as the continued convergence of mobile and fixed-line services) impact offerings addressed to our new customers. In addition, due to high competition, we continuously invest in customer retention programs and building the loyalty of our customers.

We believe that at present our programming packages constitute an attractive value-for-money offer on the Polish pay TV market. Moreover, we invest in new, attractive and unique content. This gives us a chance to attract a significant portion of migrating customers to our platform. What is more, we offer pay TV services as part of our integrated offer, which has a positive impact of the level of loyalty of our customer base and contributes to maintaining a low churn rate.

Dynamic growth of non-linear distribution of content**, delivered by video on demand and OTT (over-the-top) services is a global trend. In Poland, this market has been growing rapidly in recent years and its attractiveness is proved by the launch of services by global players, such as Netflix, Amazon Prime, HBO, Disney+ or SkyShowtime. In addition, one of the consequences of the COVID-19 pandemic restrictions has been a deepening of pre-existing trends of consuming content at any time and on any device. In view of the above, we systematically develop our VOD and online television services and applications.

At the same time, there has been a noticeable trend in Poland to increase prices for pay TV services, which is a natural consequence of the distinctly rising costs of purchasing and producing in-house content. Retail price increases apply to basically all technologies – from traditional satellite platforms and cable offerings, through IPTV offerings, to VOD and OTT platforms. In the future, this trend may translate favorably into ARPU growth while, at the same time, it may cause a part of customers to be inclined to limit their parallel use of more forms of access to paid content.

Links: Cyfrowy Polsat