COVID-19 favors a stable situation in the paid television market and stimulates the growth of the SVOD market
According to PMR data, in 2020, the paid television market in Poland saw a 1% increase in value, reaching 6.2 billion PLN. In contrast, the value of the VOD market is estimated at 1.3 billion PLN, representing a 25% year-on-year growth. The disparity between the markets is due to the different levels of service saturation, as well as factors that dilute the ARPU from VOD services. In 2020, the COVID-19 crisis paradoxically benefited the paid television market and VOD services.
Find comprehensive information about the current state of the Polish pay TV and VOD market in the PMR report:
Does the VOD market cannibalize paid television? Why?
The paid television market in Poland remains stable, both in terms of quantity and value, although with a slight tendency towards decline. This is mainly due to the relatively low prices of television subscriptions, including premium content (compared to European rates), as well as service packaging mainly including access to high-speed internet (the COVID-19 crisis has only accentuated this trend). The strong position of paid television providers affects the VOD market in Poland, which, although developing rapidly, still has a significant demand gap in terms of access to paid services (due to consumer budget limitations).
In 2020, the COVID-19 pandemic led to accelerated growth in the number of SVOD service subscriptions. The effect of the coronavirus should also be visible in the short term. At the same time, PMR estimates that the growth in SVOD subscribers significantly limits the trend of content sharing, which will also persist in the market over the next six years.
Paid Television Market: Value Growth Despite the Pandemic
According to PMR data, in 2020, the paid television market in Poland saw a 1% increase in value, reaching 6.2 billion PLN. The market conditions are positive, despite a slight decline in quantity, similar to the previous year (-0.1% YoY).
This indicates that the COVID-19 crisis had a neutral or even positive impact on the market, contributing to greater customer loyalty (lower churn rate) of paid television subscribers during the lockdown. Despite the challenging macroeconomic situation, paid television providers were able to raise ARPU (Average Revenue Per User) through upselling additional products and services (such as premium channel packages). Temporary channel access, including premium channels, from higher-tier television packages during the first wave of the COVID-19 pandemic also played a role in this regard.
The PMR survey results show that this prompted some subscribers to upgrade to more expensive television packages with these channels in the last year.
From 2021 to 2026, PMR predicts slight declines for the paid television market, both in terms of quantity (CAGR 2021-2026: -0.2%) and value (CAGR 2021-2026: -0.7%). The main trends that will dominate the market are further service packaging and the premiumization of offerings, which means the development of premium products and services.
VOD Services: SVOD Platforms Energize the Market
The number of users of VOD services in Poland is experiencing dynamic growth, reflecting the continued low saturation of the local market with these services, especially in terms of access to paid platforms. On the other hand, free services have already reached a certain critical mass, indicating high penetration. According to PMR data, a total of 9 million households used AVOD services in 2020, translating to a 62% penetration rate. However, the number of households exclusively using AVOD services declined for the first time last year. This is a result of greater migration of users towards paid VOD services, particularly subscription-based platforms. The COVID-19 crisis generated additional demand for SVOD services. PMR estimates that almost 900,000 new SVOD subscriptions were added in 2020, compared to about 500,000 the previous year.
In terms of value, the VOD market is also benefiting from the growing volume and strengthening ARPU. PMR estimates that the market value reached approximately 1.3 billion PLN in 2020, growing by 25% year-on-year. However, this value is still significantly lower than the value of the paid television market in 2020 (6.2 billion PLN). Obviously, the different levels of saturation with various services play a significant role. Additionally, the VOD market is not dependent on the cyclical payment of subscriptions due to contractual agreements with service providers. The market is also limited by the trend of sharing subscriptions within the SVOD segment, which dilutes the ARPU.
From 2021 to 2026, PMR predicts further growth for the VOD market, both in terms of quantity (households) with a CAGR (Compound Annual Growth Rate) of 3.2%, and in terms of value with a CAGR of 8.1%. However, the growth rate is expected to be lower year after year. The main trends that will dominate the market include an increasing migration towards paid VOD services, especially SVOD, continued sharing of subscriptions for subscription-based services, and a rising number of SVOD services per household (a maximum of 2 services by 2026).
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