TVN gave more details regarding the acquisition of ‘Mango’ teleshopping channel available on cable and via satellite to 5m households in Poland for EUR 13.0m, announced on Friday. TVN said that it wants to increase ‘Mango’ revenue to PLN 200m over next 5 years (tenfold, but not far from growth forecasts of 600% over next 5 years for the industry in the CEE), and achieve sales margin of 500%, (again not far from industry standard of 400% - 700% margin) over next 5 years. The company added that it wants to exploit synergies with its production potential and diversify the revenue stream. Currently there are 5 teleshopping channels in Poland.
The acquisition price of EUR 13.0m might seem rather high, considering early stage of development of teleshopping market in Poland. Moreover ‘Mango’ competitive advantage seems questionable, given very basic programming standard at this type of TV channels. It seems like launching its own teleshopping channel should not pose any problem for TVN, considering the market potential and TVN plans to enhance ‘Mango’ standards on its own (live programming, viewer interaction, etc.). We would expect a rather negative market reaction on the back of news.