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Providers: Media Groups Issue Ultimatums

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December 14, it was held one more discussion of the recent hottest topic for the Ukrainian telecom market, i.e. the abolition of must-carry obligations and the negotiations between media groups and providers on the broadcasting terms of TV channels in cable networks. In late October, the providers signed an agreement on joint opposition to the media groups. Last week, a number of providers, including the largest operator VOLIA, expressed their willingness to cut off TV channels of media groups on January 1. And the day before, it became known that “Triolan” settled a bargain on broadcasting TV channels in its networks under subscription.

George Zhemberi, CEO at VOLIA, reassured that the company was in favor of strengthening pay-TV positions, but in that case, the model was not so clear. “There is an advertising model, when channels can even pay for their presence in the network; there is another one, when the signal is encrypted on all the platforms for viewers to pay for content. We are looking forward to the analog cut-off, satellite coding, and efficient anti-piracy to build a business model. The offers are mostly not clearly shaped. We received a professionally drawn offer from one media group, and another one, close to professional, from the other group. In addition, we received some kind of letter, and we also got some prices”, as Mr. Zhemberi said.

Fedor Grechaninov, StarLightMedia, being traditionally the only representative of the media groups during such discussions, focused on the fact that, in his opinion, it was incorrect to call the media groups’ channels the subscription-based ones: “The channels remain free of charge and even pay money for distribution. The message that the channels become paid for audiences is incorrect. We are about to charge providers doing business. They are to decide whether to buy our channels or not, we do not force them. If on January 1 the channels disappear, so the subscribers should understand that it was the providers’ decision”. In response to the argument that media groups provide content on terresterial for free, while charging cable operators, Mr. Grechaninov referred to the USA with a similar model.

Vadim Sidorenko, “Triolan” explained his decision to include TV channels in a paid package: “The media groups’ channels were broadcasted in our networks without any subscription fee, so we have to either turn them off, or set a fee. Therefore, when they say that the channels remain free of charge, this is not true. The terms offered by media groups entail three main issues. The first one is a request to include them in the social package. The business is over here within terms dictation. People have the right to pay only for the channels they want to watch. The second issue is the price. We are actually talking about starting prices, which are not so low, but the market will withstand them. But the media groups are speaking about further price increase. Then everybody will have to pay without fail, since the channels are present in the social package. The consequences are as follows: some subscribers will go to terresterial, and some will pay for all due to the unavailability of packaging. Another issue is that the actual package offer contains 24 channels. And if they launch another 10 channels? Then the rest ones will not fit physically, and we will have to watch only TV channels of the media groups. These points do not provide for any limiters in the offered terms. I can not see the problem on January 1, as everything is clear, but we may have a dead-lock in the long-term”.

The discussants and attendees also outlined the above problems, as well as mentioned the threat of information security, if audiences move to the satellite TV with public access, where Russian channels broadcast. There were also put questions to the Antimonopoly Committee and the National Broadcasting Council, why the provider Zeonbud would be provided with content free of charge.

Marian Ivasyuk “Lanet” spoke out quite peremptorily: “We do not agree to go into voluntary slavery, because these are not negotiations, but media groups’ ultimatums. In the near future, we will run a test cut-off. And if the media groups do not change their position by January 1, we will cut off their channels completely”.