Turbulent times

Just how will the global economic crisis affect the TV industry in Central and Eastern Europe (CEE)?

This is undoubtedly a question that many of us are asking as the world finds itself in the biggest downturn in decades. The short answer is that no one really knows: the novelty of the situation, which changes almost by the day and shows little if any sign of improvement, can only lead us to speculate about what may lie ahead.

However, two news items from earlier this week might give us some clue. The merger of Eurocom Cable and CabelTEL, Bulgaria’s two leading cable operators, finally appears to have been called off – not apparently, due to competition concerns, which were investigated by the authorities, but because Warburg Pincus Private Equity, Eurocom Cable’s backer, couldn’t secure the necessary funding.

It seems the deal was a direct victim of the credit crunch, and with the markets in turmoil, and liquidity drying up rapidly, we will probably see fewer such mergers and acquisitions in the next year or two, or at least until the worst of the crisis is over.

The second piece of news was the extraordinarily rapid take-up of DTH in Poland. It seems hard to believe, but some 20,000 customers are signing up each day to services offered by the country’s satellite platforms, which have recently been joined by TPSA’s Orange and the pre-pay TNK.

While such a growth rate is clearly a short-term phenomenon, it just goes to show what can be achieved, even in such a difficult economic climate, if you get your strategy right. Cyfra+, which accounts for around half of the daily growth, has recently clamped down on piracy and begun to strongly market its product.

What is more, the growing popularity of DTH is by no means just a Polish phenomenon, with the Sky Link pre-pay service in the Czech Republic and Slovakia having just clocked up its 500,000th customers. Meanwhile in Russia, Tricolor TV tripled its subscriber total from 1 to 3 million in the first ten months of this year.

We may be living in turbulent times, but the future is not as bleak as some of us may believe.