Voyo will not join the price war with foreign video services entering the Czech market this year. Daniel Grunt, Head of Digital of Nova and CME, said that at the Digimedia 2022 conference on Wednesday. “We will not participate in the competition for the lowest price. Although I understand the promotional incentives of new players, we know from our research that this is not the most important thing for viewers,” said Grunt. Voyo is supposed to be a local premium service and considers undercutting a factor that will harm the brand in the long run.
Users pay CZK 159 per month for using the service. Global paid VOD services HBO Max and Disney+ that are entering the Czech market this year have standard monthly prices set at CZK 199. However, they attract viewers to special offers thanks to which you can get a monthly subscription for CZK 133.
According to Daniel Grunt, the service usage rather than a price difference of tens of Czech crowns plays a role in customers’ decision making. “When viewers realise that they do not use the service much or not at all, they leave. We seek to make people watch and increase the frequency so that they go back to Voyo,” explained Grunt.
Local content having more chances
In general, he welcomes the arrival of global players. He considers the Czech SVOD market to be developing and the entry of foreign players can help educate viewers and accelerate market penetration. “The number of services individual households subscribe to will also be growing. We are protected by producing local content,” he mentioned. As global companies lack local content, he expects that the competition on the SVOD market will be predominantly felt by foreign providers. “HBO Max will feel it a little more as it has less content,” he adds.
Martin Cepek, who has recently joined České Radiokomunikace, agrees that a local producer has a more favourable position. “Czech content is king and although all foreign services will have an interesting customer base, I do not believe that they will beat a quality Czech content provider,” said Cepek.
Overall, video service providers fight for attention not only with one another but also with other leisure time activities. “It is not just a matter of time spent on the platform, free time as such is what counts,” mentioned Tomáš Žondra, Sales Director of Film Europe/Edisonline. That is why the art platform Film Europe seeks to adjust its offering accordingly.
Expanding the number of players on the SVOD market is desirable also for Marting Zavadil, CEO of Dramox. “Any market education is key. There is space for market growth, the more players the more people get used to selecting and switching between services,” he thinks, expecting the number of services to grow.
Ad-free Voyo with no signs of cannibalisation
The accumulated time of video viewing has been increasing, says Daniel Grunt, adding that Nova does not see cannibalisation of TV broadcasting and online video.
“We do not perceive Voyo cannibalisation with respect to linear TV. On the contrary, we can see that we are expanding and increasing the time people spend with us. Kantar’s latest research indicates that the total time watched on Voyo and linear TV is two to three percentage points higher than a year ago,”
said Grunt, explaining that the main point is how the two services complement each other.
Income from Voyo subscribers does not offset possible declines in linear TV ad sales, however, that should change in future. “We can see that SVOD services eat into the time spent with linear TV. It is about a business model,” he said, adding that audience yield from the sale of subscription is higher that the yield from viewers watching advertisements. Going forward, he expects that both yields will be combined. Voyo is not going to introduce a cheaper subscription for content with ads as Netflix does. “It is understandable with Netflix as it seeks to maintain some growth. We consider Voyo a premium service and advertising is thus out of question,” concluded Daniel Grunt.
iVysílání principally targets viewers not watching TV
Česká televize and its iVysílání is in a different position than other streaming services, pointed out Jan Maxa, Director of Development and New Formats of Česká televize. With shows produced exclusively for the internet, ČT wants to attract the attention of viewers for whom linear broadcasting is not interesting, he explained. The key target group for iVysílání are viewers aged 18-45 and various minorities. In content for young viewers, ČT targets twelve-year-olds and older for whom the children’s channel Déčko is no longer attractive, added Maxa. He also mentioned payments of TV fees by households that have no TV set and watch ČT’s programmes via the internet. “There is no way for us to account for such money as it would be a donation, not a TV fee,“ he explained.
Source: mediaguru.cz
