Public television TVP has increased its net advertising revenues by 6% y/y to PLN 1.1bn, in 2006, below the overall TV ad market, which grew at 10-11% last year, according to the station management.
Our view: TVP has lost market share in favor of TVN principally, on the back of lower audience share and not selling an entire inventory of its advertising minutes. With regard to 2007 outlook, TVP management has not commented on the rumor that it plans only single digit TV ad price increases in an effort to sell more advertising via extending the length of its commercial breaks. Nevertheless, we believe that this possibility should be considered with, particularly given recent PM Kaczynski statement, that he expects an improvement in TVP financial results. As this would mean undercutting TVN policy of steep price increases, we would view that negatively. We reiterate our Sell rating for TVN.