Polish media market grew by 10.4% y/y in 2006, according to Starlink estimates of net advertising spending, including discounts and rebates, slightly less than in 2005 (13.5%). Internet segment, up 60% y/y, grew the fastest, followed by TV, up 12% y/y, outdoor, up by 11% y/y, radio up 10% y/y, while the print media has lagged behind with magazines up by 4% y/y and newspapers up by only 3%. Starlink expects the advertising spending to accelerate in 2007, driven by launches of new telecom operators, robust consumer optimism and higher prices of TV ads.
Our view: We would expect a positive impact of the news today on TVN stock price, given that Starlink estimates for a 60% increase in internet ad spending in 2006 beat earlier forecasts of a 40% growth. On the other hand estimated growth in TV’s falls in line with earlier forecasts, while a 3% growth in newspapers marginally falls short of (reduced) target of 4%. We reiterate our Hold rating for the Agora. We reiterate our Sell rating for the TVN.