POLISH MEDIA:EVERYTHING IS POLITICS

March 2017

AmCham Marketing & Communications Committee

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OVERVIEW: THE POLISH MEDIA MARKETTHE DUOPOLY: DIGITAL AND TVDECLINE OF PUBLIC TV ACCELERATESONLINE VIDEO IS EXPLODINGTHE ADBLOCKALYPSE

PRINT MEDIA’S AGONY CONTINUESTHE STAMPEDE TO DIGITALSTORM CLOUDS OVER PRINT: SOROS TO THE RESCUE!REPOLONIZATION: FOLLOWING IN PUTIN’S FOOTSTEPS?

HOW TO GET NOTICEDCONTENT MARKETINGTALKING TO JOURNALISTS: 3 TIPS

The Duopoly: Digital and TV

Similar to other markets: Digital is squeezing out print and radio

Media groups are expanding online video

Trend is accelerating: Wyborcza sacking top journalists; Sukces and Bloomberg BusinessWeek going digital-only; BusinessInsider enters the market

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Poland Czech Rep. Germany USA

Source: MEC

49,7 47,7 45,7 45,9 42,9 49,6

25,2 23,8 26,741,5 44 43,6

7,5 6,7 7,4 6,8 7,14,6

4,3 4,2 4,4

6,1 4,7 4,1

13,97,7

1,915,5

9,9 6,642,7

34 23,7

22,2 13,37,8

15,8

9,4

4

17,2

12,1 10,2

17,3

13,9

11,3

19,9

16,412,9

319,8

33,3

7,318,1 21,1

4,619

27,1

7,919,1

29,2

10,1 8,7 7,7 7,3 9,9 7,9 5,9 5,1 6,8 2,4 2,5 2,4

2005 2010 2016f 2005 2010 2016f 2005 2010 2016f 2005 2010 2016f

TV Radio Newspapers Magazines Internet Other

Distribution of Ad Spending

Decline in Public TV Viewership Accelerates

Expansion of terrestrial digital: continued fragmentation, continued dominance

Public TV market share continues shrinking after politics takes center stage

Polsat takes the lead as most popular TV channel, overtaking TVP1

TVN’s Fakty becomes top news program

Viewers flee TVP’s main news programs, then stay away for prime time

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78% 74%67%

60%48%

43% 41%

2005 2007 2009 2011 2013 2015 2016

Top 4 (TVP1, TVP2, TVN, Polsat) share

Polsat11,45%

TVP111,10%

TVN10,37%

TVP28,32%

2016

Polsat11,60%

TVP112,28%

TVN10,65%

TVP28,72%

2015

Source: MEC

Politics Shapes Ad Spending

State-owned giants halt advertising on TVN, spending it on less popular TVP

PGNiG absent from TVN since 2015, PGE left in 2016, Orlen and PZU in 2017

Ad prices at private stations unaffected so far

Anecdotal evidence of advertisers saying “I’m not going to advertise on that propaganda mouthpiece”

Remember: TV in Poland is still CHEAP compared to elsewhere in Europe

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Top 10 State-Owned Advertisers on TVP and TVN

Source: Kantar Media

TVP61%

TVN39%

2015

TVP79%

TVN21%

2016

TVP84%

TVN16%

JAN-FEB 2017

43%

35%

76%

33%

25%

9% 4%

30%

16%18%

aVOD aVOD/sVOD/tVOD aVOD/sVOD PAID TV sVOD

Most Popular Sources of Long-Format Videosin 2016

Online Video Is Exploding

Online video ad spend is PLN 300 mln - 350 mln

Higher than spending on dailies, almost 10% of TV spend

Mainly taking share from press; in other markets, becoming a threat to TV

Investments in online video: Poles don’t read

Netflix vs Showmax: Poles will pay, but:

• they demand value for money

• local content is key

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Source: MEC VIDEO TRACK 2016

Key Trends: AdBlockalypse

Number of users with ad blockers installed is No. 2 in Europe

Trend is particularly strong among young users

Media are starting to demand white-listing

Advertisers are responding by shifting to Facebook and content marketing

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Source: MEC Wavemaker

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PRINT MEDIA’S AGONY CONTINUESTHE STAMPEDE TO DIGITALSTORM CLOUDS OVER PRINT: SOROS TO THE RESCUE!REPOLONIZATION: FOLLOWING IN PUTIN’S FOOTSTEPS?

The Stampede to Digital

Agora expands digital; >100,000 Wyborcza subscribers (cf. NYT, WaPo)

Dailies expand Internet TV offerings: Wyborcza, Rzeczpospolita, Parkiet

Arms race – Ringier Axel Springer (Onet, Forbes) vs Wirtualna Polska:

• heavy investment in expansion of internet television services

• new channels/programs; hiring celebrities, including those sacked from public TV

• No. 3 web portal Interia also expanding

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Source: Gemius/PBI

Users of Weeklies’ Websites (mln)

2,51

1,311,09

0,68 0,63

2,98

1,72 1,601,47

1,30

newsweek.pl wpolityce.pl niezalezna.pl polityka.pl wprost.pl

Dec-15 Dec-16

Storm Clouds Gather Over Print

Sales of dailies continue to fall; only Gazeta Polska Codziennie sees sales growth

Agora cuts costs, sacking top journalists

Soros buys 11% of Agora from pension funds; political gesture to defend independence

State-owned Orlen/Lotos limit displays of Wyborcza newspaper at their gas stations

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0

100 000

200 000

300 000

400 000

500 000

600 000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Av

era

ge

sal

es

Average Sales of Dailies

Fakt

Gazeta Wyborcza

Super Express

Rzeczpospolita

Dziennik-Gazeta Prawna

Gazeta Polska Codziennie

Puls Biznesu

Parkiet

Source: ZKDP

The Word of the Year: Repolonization

Government working on antitrust law changes to limit foreign ownership (cf. U.S., France)

After banks and power, another sector where government wants to increase influence

Axel Springer CEO: Poland following in Putin's footsteps (retroactive ownership limits)

Market impact:

• will they find buyers?

• quality may drop

• exodus of journalists could push down sales

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•No.1 Radio: RMF FM – 24.5% market share

•No.1 Magazine Publisher: 38 titles

•No.3 web portal: Interia.pl

•No.1 Daily: Fakt – 281,242 copies sold in 2016 on average

•No.3 Weekly: Newsweek -112,112 copies sold in 2016

•No.1 web portal: Onet.pl

•Forbes

•No.1 publisher of regional dailies: 20 titles

•150 regional weeklies

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HOW TO GET NOTICEDCONTENT MARKETINGTALKING TO JOURNALISTS: 3 TIPS

How to Get Noticed: Content Marketing

Solution to AdBlockalypse

Can address all media and platforms

Businesses need an arsenal of content creators (including professional writers, editors, designers, analysts)

Consumers are spending more time online: use data to drive strategies

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Talking to Journalists: 3 Tips

Talk to news agencies: ISB News, PAP Biznes

• media outlets are cutting their business desks

Recognize that cross-platforming may push down quality

• print journos required to write online (Bonnier: Puls print, pb.pl and bankier.pl; Wirtualna consolidates money.pl with finanse.wp.pl; Axel)

• news may go stale as it appears in other media from the same owner

Changes in the press law: deadline for authorization; other changes?

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ALDGATE STRATEGY GROUP SP. Z O.O., UL. NOWOGRODZKA 21, 00-511 WARSZAWA, WWW.ALDGATE.PL

OLGA MARKIEWICZ

(+48) 601 286 362 olga.markiewicz@aldgate.pl

NATHANIEL ESPINO

(+48) 696 041 731 nathaniel.espino@aldgate.pl

PAWEŁ KOZŁOWSKI

(+48) 601 957 807 pawel.kozlowski@aldgate.pl