TVN parent company ITI has signed an agreement with TPSA to put several of its channels, including TVN (general), TVN Siedem (film repetitions) and TVN Gra (quizzes and games) on TVSA’s Videostrada, which offers television via ADSL connection for up to 2m subscribers in Poland. The rest of TVN programs, most importantly the successful round the clock news channel TVN24, would be available for Videostrada users only via pay-TV Cyfra+ packages.
Our view: Videostrada is still in its infancy, therefore we think it is too early to put additional revenue streams to our forecasts from the contract signed. But we view the news positively for both companies. For TVN in creates additional distribution channel and it strengthens TVN negotiating position with cable operators. For TPSA, it simply makes Videostrada more attractive. We reiterate our Hold rating for TVN and we reiterate our Buy rating for TPSA.