Chris Dziadul Reports: Spotlight on Croatia

Here’s a strong hint: keep your eyes on Croatia over the next few months.

On recent evidence, the country, as well as its TV industry, is about to enter a period of change, some of which could be far-reaching.

Just last week a local business newspaper carried a report that CME, which operates the national commercial station Nova TV, plans to exit the market, along with neighbouring Slovenia. Despite failing to name any sources, it was quickly picked up by news agencies and then the international press. We at Broadband TV News decided not to carry it, though are of course keeping a close eye on developments and still waiting to hear anything official and on the record from CME.

Should CME indeed decide to sell up it should in some ways come as no surprise, given the company’s parlous financial situation. Despite making progress on a number of fronts, especially on the content and new media side of its business, including with the SVOD service Voyo, it remains a hostage to the TV ad market, which is showing no real signs of recovery in the six CEE markets the company is present in.

CME has been an ever-present in the region for nearly two decades and pulled out of markets before – Ukraine (Studio 1+1), Hungary (TV3) and Poland (TVN). Withdrawing from Croatia would nevertheless be a far-reaching move, given what probably lies in the store for the country.

This was outlined in some detail earlier this week in London at a Capital Markets Morning organised by T-HT, the Deutsche Telekom-backed incumbent telco. Ivica Mudrinic, its president of the management board and CEO, said that if all goes according to plan the country would accede to the European Union on July 1 next year. This, it is believed, will have a positive effect on its economy, which has been one of the slowest in the region to recover since entering recession at the beginning of 2009.

T-HT itself operates in a market that, despite its small size – 4.3 million people and 1.5 million households – is characterised by strong competition. It goes without saying that one of its biggest rivals is the innovative cable operator Bnet, which, perhaps not surprisingly, was barely mentioned at the event. There is also the small matter of a new pay-DTT service that was launched by Croatia Post and the national transmission company OiV earlier this month. Watch this space.

However, T-HT still retains an impressive 59% share of Croatia’s pay-TV market, with its MAXtv operation head and shoulders above the others. As of the end of the third quarter, its TV subscriber total stood at 349,000, which was 3.7% more than a year earlier.

At the event, T-HT was also able to point to the success of its MAXtv to Go service, which is available anytime, anywhere on PCs, tablets and mobile devices. Launched only two months ago, it already has 11,000 subscribers.

Ivica Mudrinic was keen to emphasise that MAXtv is a content business rather than a platform and that the company’s success in the pay-TV sector is largely down to its ownership of exclusive rights to content, with football being one of the most important.

Dino Dogan, a member of the management board and the CFO, revealed in his presentation that the company is keeping a close eye on external investments in the region, while Norbert Hentges, a member of the management board and COO, said that the company’s strategy now involves moving to an eBusiness. In the TV sector, this will include the launch of more service apps like MAXtv to Go.

It’s also worth bearing in mind when looking to the future that next May will see the launch of Croatia’s first international content market. Competing directly with NATPE Budapest, New Europe Market (NEM) will take place in Dubrovnik and could in due course develop into a major event.

All in all these are interesting times in Croatia and the best is undoubtedly yet to come.