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Daniel Grunt, Chief Digital Officer CME and CEO TV Nova: Local content and brand building essential for success, Pt.1
 05 Jun 2024
In an extensive and all encompassing interview, Daniel Grunt, Chief Digital Officer CME and CEO TV Nova, and Yako Molhov discuss the latest developments within CME’s media business, namely the milestone achieved by streaming service Voyo and the continued success of the linear TV operations in Czechia, as well as plans to invest further in the group’s brands and push forward with even more original content.

Daniel, in our interview last year you said you expected Voyo to reach 1 million viewers by 2026 in Czechia and Slovakia. This is already a fact for all your 6 territories combined - in February CME announced you have reached this milestone. To what do you attribute this huge success, which also marks a nearly seven-fold increase since 2020 and is especially impressive bearing in mind the international crisis and people cutting back on entertainment expenses?

The most crucial aspect is the content we create. We focus on premium local productions, which are locally relevant, collaborating with the best creators and creative teams in the market. The results are already visible, as Voyo Originals are collecting numerous awards. Our content is highly valued not only by the public but also by experts.

Furthermore, significant investments in brand building play a vital role. Voyo is the strongest and most recognized brand in the SVOD market, alongside Netflix. The Voyo brand is associated as a local champion linked with premium local content.
Equally important is our work with our users to ensure maximum engagement. Currently, we're reaching an average of up to 15 tracked hours per week.

The numbers reveal that out of these over 1 million subs 800.000 are in Czechia and Slovakia. What is your strategy to attract more subscribers in the rest of your territories?

The strategy is to build on what works and is successful in the Czechia and Slovakia, taking into account country-specific factors. However, the core will always be a close connection with the strongest local television stations in the local market, which belong to the group. The goal is to offer content anytime, anywhere, without ads. Of course, focusing on local content in each individual market and investing in brand building are also essential.

At the height of the "streaming wars," all the major streamers focused on getting more subscribers, investing billions in content; then the crisis came and they shifted the focus on cutting costs and eyeing profit. Where does Voyo stand in this respect, is the service already profitable?

The crisis hasn't had a significant impact on Voyo. Our subscription price remains very affordable, offering entertainment for the whole family throughout the month. While people cut back on more expensive cultural expenses like concerts, Voyo provides a cost-effective alternative, with a monthly subscription costing less than a single cinema ticket for the whole family.

Furthermore, Voyo is not just weathering the storm; we're investing even more. We see this as a competitive advantage.

Another major SVOD trend is turning to advertising-supported tiers. Obviously Voyo works just fine with its current subscription model, but have you also looked into ad-tiers? Perhaps in the territories that it does not bode so well as in Czechia, Slovakia and Slovenia? Voyo's subscription price is very attractive, have you considered any price hikes like the international streamers?

We always consider various scenarios based on specific market triggers. In the future, it's expected that we'll gradually introduce an ad-supported tier across all markets. However, timing is key. In regions where Voyo is currently experiencing strong and rapid growth, it's not advantageous. Once the pace of acquisition and growth slows down, it will be one of the tactics we deploy.

Regarding subscription prices, we evaluate them on a market-by-market basis. For instance, we have no plans to increase prices in Czechia this year.

You are both CME's Chief Digital Officer and the CEO of TV Nova, the company's flagship broadcaster in the region. How do you manage to operate a profitable streaming service and also operate the TV market leader: isn't streaming hurting your "golden goose" (or in your case "golden swan" - more on that later in the interview), what is the successful synergy between those two?

Operating both Voyo and TV Nova allows us to leverage their complementary strengths. At the beginning we used TV Nova's extensive audience base to drive awareness for Voyo.

Our current strategy revolves around creating activities aimed at achieving maximum combined reach for our content, regardless of the platform. While there is certainly some cannibalization occurring, our goal is to effectively manage it so that it is minimal. As linear TV viewing time declines, the reach of our content, and consumption, continues to grow.

In today's landscape, where there is a clear trend of linear television shifting to streaming services, it's always better to independently manage and regulate content, distribution and monetization, and not let the actions of others influence you.

How is video consumption and TV viewing changing in CEE? What are the latest trends, we see TSV is gradually decreasing, is that at the expense of streaming? CME operates in territories that are different when it comes to TV consumption, i.e. Romania and Bulgaria have always had a strong cable TV and satellite market while viewers in Czechia, for example, prefer DVB-T. Are things changing in this respect?

In the CEE region, like elsewhere globally, traditional linear television is experiencing decreasing viewership, with attention shifting towards time-shifted viewing, catch-up services, and streaming platforms. CEE stands out as a stability island, with a slower decline compared to regions like America or Western Europe.

We see a stagnation of paid television operator numbers, alongside a decline in some areas in favor of OTT services, reflecting global trends. Consequently, we are investing heavily in Voyo as an OTT service.

In response to these changes, CME is investing in both traditional TV broadcasting and Voyo to meet diverse audience needs and prepare for future growth in this dynamic environment.

You announced that Voyo is the leading local streamer in almost all of your territories. What is the situation compared to international streamers, namely Netflix which usually tops the streamers chart in every territory, what do your numbers indicate? Do you have any concerns international streamers will start to invest into local originals in your major markets?

In almost all of our markets where we operate, we are the top local player when competing with international services. In the Czechia and Slovakia, we rank second after Netflix, while in Slovenia, we hold the number one position.

Our strategy of consistently being the strongest local service has proven successful in our markets. We see ourselves as a complementary option to the largest global services. We're not overly concerned about multinational players making significant investments in our markets, as they may introduce only two or three titles, whereas we produce a much larger variety of content.

What is your distribution strategy for Voyo - sell it as a stand-alone service or you work more with operators? And what is the situation with reach, loyalty, brand awareness? In 2023 studies show Voyo placed second after Netflix in terms of brand awareness in Czechia which is a strong result bearing in mind the availability of brands like HBO Max, Disney+; etc. How would you improve Voyo's brand awareness in other territories?

Our approach involves long-term, consistent brand building. The recent implementation of a new Global Identity, unifying the brand across the region and defining key brand elements, will aid in this effort. Additionally, we tailor our product proposition to be relevant to each market. For example, our focus on local content, ad-free viewing, original programming, and content availability before TV broadcasts resonates well. We believe this approach can be replicated successfully in other countries as well.

Our goal is to be very strong in B2C distribution, as it defines the service and brand strength in the market and the willingness of customers to pay for it. While B2B distribution is important, we prioritize strengthening our B2C distribution channel, which positions us strongly in the market.

Voyo is one of the strongest brands in most of the countries where it operates. Prompted awareness is around 88%. As for brand awareness, both spontaneous and top of mind, we have the second-highest levels, closely behind Netflix. In Czechia, it ranks second, on par with Netflix, while in Slovenia and Slovakia, it leads ahead of Netflix, with a significant gap between Netflix and other competitors.

Since 2021 Voyo has released 37 originals, with 7 planned for this year. What are the most-popular genres for your streaming service (alongside crime) and how do you develop content for Voyo, do you have a special development and commissioning teams? What have been your most-successful titles alongside Iveta, The Extractors, Metoda Markovic; etc?

We have a special development department headed by Michal Reitler who is one the most renowned content gurus in the market. He stands behind some of the most successful projects produced, especially on public television. And we are proud of being able to work with him. He built a team of creative producers and writers who focus on different segments of development from scripted comedies, dramas, crime to docu series. In general, we have a single content team for both Voyo and television, to maximize synergy. Within this team, one segment specializes in programming, acquisitions, and Voyo content separately.

In the Czech market, the most popular is the medical series Rose Garden Clinic, which used to be the most beloved title on linear, continues on Voyo. Among newest projects, true crime series and true stories are extremely popular. So, basically scripted series based on topics which are relevant for the Czech market.

We are extremely thankful and proud that we can produce them with the best creators and producers on the market, and that viewers very much appreciate the quality of the Voyo Originals.

Currently, The Markovič Method: Hojer, from the Voyo Original lineup, is the strongest performer in the Czechia and Slovakia. Mathematics of Crime has won awards such as the Czech Lion and Slnko v sieti. We are starting to gain recognition at festivals, both industry-specific and audience-oriented. There is growing interest in our content from international distributors, with The Extractors being one example. One of the most successful still remains Case of Roubal, which was the first true crime launched on Voyo and received great feedback.

What is the budget for Voyo content for your, let's call them key markets since they deliver the highest growth - Czechia, Slovakia and Slovenia and also for Romania, Croatia and Bulgaria? Will Voyo users in Romania, Croatia, Bulgaria see more Voyo Originals?

The budget for Voyo content increases annually, with the highest investments currently focused on Czechia, Slovakia, and Slovenia, as they exhibit the highest growth. However, we are also strengthening our investments in other markets.

Continues here

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