Industry Trend Analysis - Convergence Potential At Risk From Heightened State Interference - MAY 2017

BMI View : Heightened state intervention in the mass-media market puts much-needed cable TV consolidation at risk . Directly accessing customers' subscription records as a means of applying licence fees could constitute a violation of EU data privacy laws, with pay-TV providers caught in the regulatory and legal crossfire likely to be less willing to contemplate mergers that would benefit convergence.

The Polish government has outlined plans to direct the country's pay-TV providers to pass their customers' details to the national postal service as a means of facilitating payment of licence fees. Ostensibly, the move is aimed at curbing the proliferation of piracy and funding the state owned free-to-air broadcaster at a time when low-cost streaming service adoption is growing rapidly. Up to 2.8mn pay-TV subscribers could be made to pay receiver licence fees, generating up to PLN730mn (USD180mn) for state broadcasters. However, there are numerous industry and operational risks associated with this move that are likely to have an adverse effect on the legitimate domestic pay-TV market.

The biggest risk is one of data security. The national postal service is state-owned and the concern is that the government could use subscribers' data to monitor its citizens' usage of key media platforms and move quickly to clamp down on such platforms at times of civil unrest. Pay-TV providers also question the need to create another database, as this would likely incur administrative costs they would have to bear. Thirdly, there is the complex issue of liability relating to misuse of customer data; by passing on such information to the state, pay-TV providers could be held responsible in the event duplicated data are stolen or misused even though they may not be directly at fault.

TV Figures Highly In Advanced Service Packages
Poland: Telecoms Bundles By Type (% of Total)
Source: UKE, BMI

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