Advertising and sponsorship

Advertising and sponsorship are two key revenue sources in the TV production and broadcasting segment (about 80% of total revenue in 2013).

Nearly all of the advertising revenue is acquired by the Polsat Group’s advertising company – Polsat Media Biuro Reklamy Sp. z o.o. Sp. k., which operates on the market as an advertising agent (seller) for the Group under a cooperation agreement of December 27th 2003. Polsat Media Biuro Reklamy Sp. z o.o. Sp. k. is responsible for selling all advertising formats: commercial spots, sponsorship and other related contracts. Polsat Media Biuro Reklamy Sp. z o.o. Sp.k. provides advertising support to all the Group’s channels, with the exception of Polsat JimJam.

Main trading partners of Polsat Media Biuro Reklamy Sp. z o.o. Sp.k. include international media houses, which act as intermediaries negotiating contract terms and running advertising campaigns for their clients. Advertising time is sold under year-long contracts with media houses or direct orders from clients.

Content distribution via the Internet

Programming content distribution via the Internet is another source of revenue for the Polsat Group. The Polsat Group’s partner in this area is Redefine Sp. z o.o., owned by Cyfrowy Polsat. Redefine Sp. z o.o. is the operator of the IPLA online TV – the leader of the Polish video online streaming market, both in terms of its compatibility with a range of devices (computers/laptops, tablets, smartphones, TV sets with Internet access, set-top boxes, game consoles) and in terms of content volume.

Broadcasting of programming content over the Internet is based on two settlement models.

• In the first model a fixed monthly fee is paid for the right to broadcast a given programme,
• while the second model provides for a percentage share in the advertising revenue generated by ads placed around the broadcast material.

In the case of the IPLA service, about 75% of total revenue is generated by advertisement sales, and about 25% is derived from content purchases by users.

Sales team

Polsat Media is responsible for sale of advertisements and sponsorship packages, planning of campaigns, post-sales analyses, market surveys and other research, new product development, and – last but not least – improving relationships with current and potential advertisers. The advertising agent is also responsible for allocating commercial spots in line with customers’ expectations as to the programming context and broadcasting time of individual campaigns. As a member of EGTA (association of television and radio advertising sales houses), Polsat Media Biuro Reklamy has a unique opportunity to work with sales houses from all over Europe.

Sales of broadcasting rights to the Group’s channels to cable and satellite networks

This revenue source accounted for 17.5% of the segment’s total revenue in 2013. As a rule, agreements for the distribution of the Group’s TV channels over cable and satellite networks do not include exclusivity clauses. Standard distribution agreements set monthly fees for delivering the signal of the Group’s channels to subscribers of a given network. The fee rates depend on the number of subscribers reached by our channels.