Lenka Hrivnáková, Author at The Association of Commercial Television

APA, ASAF, TELEVISION NOVA AND PRIMA CONCLUDED A MEMORANDUM

Representatives of the APA, ASAF, TV Nova and FTV Prima signed a Memorandum on further joint action following the implementation of the European Audiovisual Services Directive.

The APA (Association of Producers in Audiovisual), ASAF (Animation Association), TV Nova and FTV Prima signed a “Memorandum of Understanding” on Friday 23 September at the Serial Killer International TV and Online Series Festival. Namely, APA Chairman Vratislav Šlajer and APA Board Member Filip Bobinski, ASAF Board Chairman Martin Kotík, ASAF Vice-Chairman Marek Toušek, Nova CEO Klára Brachtlová and Prima CEO Marek Singer declared further joint action following the implementation of the European Audiovisual Services Directive in the interest of the development of the Czech audiovisual market.

The participants of the memorandum stated that they defend the best interests of Czech audiovisual industry, the rich audiovisual cultural offer for the Czech audience, the international competitiveness of Czech audiovisual industry and the related strengthening of the Czech Republic’s reputation abroad. They are thus aware that a diverse cultural offer is only possible in a diverse and free market where competition between creators, independent producers and broadcasters meets.

The Memorandum is the result of ongoing negotiations between the above-mentioned bodies, which began during the process of implementing the European Audiovisual Media Services Directive (AVMSD). It also expresses an interest in moving forward together and co-creating the terms of the legislative framework. All stakeholders welcome the planned extension of grant support for the production of cinematographic works by the State Cinematography Fund to the production of audiovisual works intended primarily for television broadcasting and VOD services and call for ensuring the stability of the system of film incentives. They are also interested in maintaining the dual system of television broadcasters.

Among other things, the AVMSD prescribes that the Member States of the European Union set certain minimum quotas for the content of independent producers or producers included in the programming of broadcasters and VOD platform operators. The participants in the Memorandum wish to find consensus on a uniform interpretation of the term ‘independent producer’. They thus agreed to make efforts to find a consensus on the definition of producers independent of broadcasters. In doing so, they will take into account criteria such as the ownership of the production company, the number of programmes provided to the same broadcaster and the ownership of secondary rights, i.e. that the independent producer owns part of the rights to use the audiovisual work or shares in the revenues from its use, in relation to his contribution to the creation of the work.

They also undertook to negotiate in good faith and to conclude within six months at the latest an extended Memorandum of Understanding setting out the minimum conditions under which a work produced in collaboration between a broadcaster and a producer will be considered a ‘work produced by an independent producer’ within the meaning of the AVMSD. These conditions will be updated at least once a year in the light of market developments.

The agreement also includes a commitment to cooperate in the preparation of legislation on important issues for the entire domestic audiovisual industry, namely: non-discriminatory setting of conditions for contributions of VOD platforms to the State Cinematography Fund (or direct investment in Czech audiovisual content), transformation of the SFK and setting non-discriminatory and effective rules for the provision of film incentives.

Source: mediaguru.cz

DESPITE THE GROWTH OF VOD LINEAR TV IS STILL CRUCIAL

Linear TV is still a key source of revenue and profits for broadcasters despite the rise of video-on-demand (VOD) services. This was one of the key topics of Innovation Day conference.

The Ministry of Industry and Trade (MIT) will continue to support the free-to-air digital terrestrial broadcasting (DTT) platform beyond 2030. Miloš Mastník, general director of Czech Radiocommunications (CRA), said this at Innovation Day conference. The future of DTT to be decided next year at the WRC 2023 conference in Geneva, which will give a hint as to whether DTT broadcasters will be able to use their existing frequency spectrum. CRA CEO Mastnik is confident that DTT broadcasting has a future beyond 2030. This is due to the current economic development, which will create a society-wide interest in maintaining DTT due to its free availability.

DTT broadcasting is still the most widespread form of TV signal reception in the Czech Republic. It is used by 54% of Czech households, and the penetration of DTT platforms has been relatively stable over time. The second strongest is IPTV reception, which has grown to 26% over the last years, on the other hand, the share of households using satellite broadcasting is decreasing (to 17.5%). In the second quarter of this year, the share of cable broadcasting increased to 13% (see chart below for more).

According to the CEO, Czech Radiokomunikace wants to further develop free-to-air DTT, but at the same time it is also seeking to develop other platforms such as HbbTV (currently 1.3 million TVs connected to HbbTV are registered) and OTT. “We are working on a paid content project and discussing the establishment of a national platform,” Miloš Mastník outlined the possibilities of developing paid content in DTT broadcasting. However, discussions are only at the beginning, he said. Alongside this, the CRAs also have hopes for 5G broadcasting, which they have been testing since this spring and which is expected to bring benefits for TV broadcasting on mobile devices. The 5G testing is expected to expand to even more transmitters. The CRA also want to focus on the development of DAB+ digital radio broadcasting.

According to CRA’s director of regulatory affairs, Marcel Prochazka, linear TV broadcasting is a key source of revenue for broadcasters from a commercial perspective. Video-on-demand services (VOD, Netflix and others) are negatively affected by rising consumer prices, with VOD growth stalling in some Western markets, he said. This is also why some providers are trying to build advertising sales into their models to make the service cheaper for subscribers. “We are seeing an increase in AVOD services that are supported by advertising. They’re being talked about by Disney or Netflix, who are also considering their own linear free-to-air channels that will be ad-supported, which is similar to the kind of TV we know today,” Procházka said. In addition, he said the financial results show that revenues and even operating margins from linear TV broadcasting are still growing, while operating margins for internet VOD services are also negative.

Source: mediaguru.cz

ADVERTISING INVESTMENT IN MEDIA HOLDS DOUBLE-DIGIT GROWTH FOR EIGHT MONTHS

All monitored media types showed year-on-year growth in monitored media investment in this year’s eighth month. To date, advertising investment in media is up 12 per cent on last year.

In the first eight months of this year, monitored advertising investment in media has increased by 12 per cent year-on-year. Television is the strongest by volume of the monitored media. Outdoor advertising showing the highest year-on-year growth this year. This is according to data from Nielsen Admosphere’s AdIntel monitoring.

The monitoring data also confirms a slowdown in growth during the summer holidays, although all monitored media were in growth in August compared to July.

Source: Nielsen Admosphere

Investment in Internet advertising does not appear in the summary of monitored investments, and this is because the Internet is represented in the monitoring only by some formats and thus does not cover the complete Internet advertising spending. However, the AdMonitoring project shows that the year-on-year development of banner advertising on the Internet this year is also higher than for the period January to August last year.

Please note that the monitored investments do not correspond to the actual investments that flow into the media for buying advertising. However, they do indicate a trend.

Source: mediaguru.cz

WHAT DOES THE RISE IN ENERGY PRICES MEAN FOR THE BROADCAST INDUSTRY?

TVBEurope speaks to a number of vendors to find out how they are preparing for the price rises, and what impact they think it will have on the broadcast industry as a whole.

Amid reports the new UK prime minister is planning to freeze the energy price cap for domestic customers, there is no news on what businesses will face in the coming months. It’s been reported that some business are facing rises of between 60 to 300 per cent on their energy bills. The broadcast industry will be one of the areas where the price rises will have a significant impact. From broadcasters producing or storing content in the cloud or on-prem, to a manufacturers creating new hardware, to studios employing virtual production, they all need energy.

TVBEurope spoke to a number of vendors to find out how they are preparing for the price rises, and what impact they think it will have on the broadcast industry as a whole.

How is the energy price increase likely to impact your business?

Andrew Culley, chief operating officer, dock 10

As a fully integrated and highly technical facility electricity is a significant cost in running our business. With the exceptional price increases that continue to be imposed those costs are rising exponentially.

Marc Wilson, Glensound managing director

The increase in energy pricing will affect every part of our business given the day-to-day gas and electricity required for our four buildings, not least the air conditioning units which have always cost a lot to run. This is especially true in our surface mount room where our circuit board oven always heats the room so it needs to be cooled down again! We have several machines that run most of the night and across the weekend, so we will feel the rise as we are a relatively high-energy user. Glensound doesn’t have any particularly high energy usage products and we have always been careful to ensure that consumption with our products remains low as many operate from 12V battery or PoE switches, but we will certainly have to consider this even more moving forward.

Chris Perkiss, head of operations, Cerberus Tech

Like all businesses, the impact of the energy price hike on our overheads will not be insignificant. The issue that is most stark for me, is that whilst all businesses are set to feel the impact in some form or another, the same is true for the individuals that make up our businesses. Our staff are our biggest asset and the huge increases in personal outgoings, not just energy prices, is affecting everyone at home as well as at work. This will undoubtedly cause a great deal of stress and uncertainty, during what has been a very uncertain time anyway. So we’re committed to ensuring that Cerberus Tech is not adding to that uncertainty.

Do you have any plans in place to lessen the impact?

AC: Before the energy crisis we had been working on a programme of activities to reduce our electricity usage. We will be reducing our carbon footprint by 5 per cent each year, becoming carbon neutral by the end of 2025 and offsetting any imbalance immediately. We are reviewing all the of the kit we use to see where we can upgrade for more energy efficient alternatives. A good example is the virtual studio where we use low-powered LED lighting. Even the most basic actions of switching off the lights in studios when not is use can make a big difference.

MW: Like most domestic homes, there will be an emphasis on warmer clothing rather than turning the thermostat up this winter! The manufacturing energy is concentrated in areas that we cannot compromise on so we will still have to use these in the same way as we do now – even with the increased costs.

CP: Our staff predominantly work remotely and, in line with our Environmental and Sustainability Policy, the vast majority of our lab and testing equipment is switched off unless it is being used. As a result our office energy usage is already relatively low. Whilst Cerberus Tech has always had a remote workforce, the pandemic has proven that our team’s productivity is maintained with reduced office presence. Therefore, we are starting to explore options to downsize our office commitment or perhaps transition to a fully remote model in the next 12 months, as an overall cost-reducing exercise. There are obviously other operational challenges associated with these changes, but it seems that the theme of the 2020s is striking a balance.

What impact do you think the increase will have on the UK’s broadcast industry as a whole?

AC: Like any business in the UK, the current energy crisis is going to be an issue for everybody, and the broadcast industry is no different. Whatever we are doing in television requires electricity and energy saving can only go so far. I know this will be a huge issue, especially for some of the smaller organisations in the industry.

MW: As with all other areas, the costs will have to be passed on. Glensound operates pretty efficiently so we don’t have a buffer to absorb the price hike. As we look at capital investment, energy efficiency will be a more and more important issue when selecting new machines.

CP: The fact is, energy prices will not stabilise for some time and therefore the only options for all businesses will be to increase revenue or decrease expenditure. This energy price hike will almost certainly force suppliers to increase prices, and some organisations will look at streamlining both headcount and resources. But buyers will respond to a changing market by seeking cheaper products and solutions. Cerberus Tech is fortunate to have relatively small premises commitments and an efficient staffing structure. The nature of broadcast-grade IP and cloud based services, also align well with organisations looking to enhance their workflows and reduce costs simultaneously.

David Radoczy, cloud solutions consultant, Three Media

Broadcasters will need to be smarter in how they manage and consume power but need the flexibility in their operating platforms and business models to make the change when the opportunities arise. At Three Media we believe the cloud provides this opportunity and for operators thinking smart working it will further justify their cloud, software enabled and virtualisation strategies.

We have been promoting the strategic imperative for broadcasters to define their cloud-based services approach. Through virtualisation and software defined solutions, the cloud enables businesses to totally re-engineer their technical, operational and financial approach. If done right, these next-generation operating models are geared to respond and manage industry as well as environmental challenges just like we are seeing with the current energy crisis.

Where the commercial dynamic works is on two major fronts. For broadcasters and all stakeholders in the media and entertainment sector you get the ability to right size your platforms and power consumption.

Steve Levy, head of HR, GB Labs

Sadly, there isn’t a price cap on energy bills for businesses. Fortunately, we were able to secure a fixed rate for our energy with our supplier, and this gives us some security during these troubled times. However, these increases further impact our entire business and our ability to keep our operating costs manageable. Our suppliers have passed on increases and our staff need support to help them cope with increased costs.

So we made some changes to address these issues;

We have reduced our expansion plans
Slowed our recruitment
Merged departments to keep running costs lower
Renegotiated supplier contracts
For our staff, we introduced more flexible working options and increased salaries.

For production and post production, changing the way they operate may be something of a new norm, leaving equipment on and operational at all times may need to be reviewed. We at GB Labs have always been committed to providing solutions that are stand-alone servers that require less energy and reduce the need for cooling, which has always been something at the heart of what we wanted to create .

There is no doubt that price increases will be a challenge for the broadcast industry, especially in a time when consumers are making decisions about their own expenditure, we are already seeing cuts in household budgets that could impact on how many times we go to the cinema or if we cancel subscriptions to a streaming services. That said, with people less likely to have disposable income, staying in may be the new going out and consumers will be very grateful for new and exciting content.

Source: tvbeurope.com

WHY ADVERTISING ON TV IS STILL THE BEST WAY TO BUILD A BRAND

TV advertising has been around since the late 1940s and it’s still one of the most effective ways to build a brand. Despite the growth of digital advertising, tv spending is estimated to reach $77.5 billion by 2024. Why is TV advertising so successful? We’ll break down the many reasons in this article.

TARGETING WITH TV IS MORE EFFECTIVE THAN EVER

TV advertising reaches a large audience with minimal effort. In the U.S., there are over 118 million households with a TV, and the average person watches over 4 hours of TV each day. This gives advertisers a lot of opportunities to reach their target market.

TV advertising is also very effective at targeting specific demographics. Advertisers can target viewers by age, gender, income, interests, and even lifestyle. This allows them to create ads that are more likely to resonate with the viewer. Digital and Connected TV makes even more TV audience data available to advertisers, making it possible to target ads even more precisely.

WHO ADVERTISES ON TV MOST?

If you want proof that TV advertising helps build brands, look no further than the biggest advertisers in the world. In 2020, the top 10 TV advertisers spent a combined $22.6 billion on TV ads. The list includes some of the most iconic brands in the world, such as Procter & Gamble, AT&T, and General Motors. While some of their commercials advertise a particular product or promotion, just as often the goal of their ads is simply to build brand awareness.

TRENDS IN TV ADVERTISING TODAY

TV advertising has been going on for nearly a century now, but that doesn’t mean it’s stagnant. In fact, there are a number of exciting trends in TV advertising today.

TV ISN’T JUST CABLE ANYMORE

Thanks to the growth of streaming services, there are now more ways than ever to watch TV. This means that advertisers can reach even more people with their TV ads. In fact, streaming services are quickly becoming one of the most popular ways to watch TV. In 2018, streaming services accounted for nearly one-third of all TV viewing in the U.S. This is expected to grow to nearly half of all TV viewing by 2024.

PROGRAMMATIC TV ADVERTISING

Programmatic TV advertising is a newer way of buying TV ads that is growing in popularity. Programmatic TV allows advertisers to use data to target specific demographics with their ads. This allows for more targeted and effective TV advertising.

CONNECTED TV ADVERTISING

Connected TV (CTV) is a type of TV that is connected to the internet. This means that viewers can watch streaming services, such as Netflix and Hulu, on their CTV. CTVs are becoming more popular, with nearly 60% of households in the U.S. expected to have one by 2024.

This presents a new opportunity for advertisers. CTV advertising allows advertisers to target viewers with ads on the platforms they are already using. This makes CTV ads more effective and efficient.

INTERACTIVE TV ADVERTISING

Interactive TV (iTV) is a type of TV that allows viewers to interact with the content they are watching. iTV is typically done through a second screen, such as a smartphone or tablet. This allows viewers to vote, play games, and even buy products while they watch their favorite TV show.

iTV provides a new way for advertisers to interact with viewers. Advertisers can now create ads that are more interactive and engaging. This helps to create a more positive brand association for the viewer.

HARNESSING MOBILE AND MULTISCREEN ENVIRONMENTS

As more and more people watch TV on their mobile devices, advertisers are beginning to harness this trend. Mobile and multiscreen advertising allows advertisers to reach viewers on multiple screens at once. This helps to create a more seamless and effective ad campaign.

THE EMERGENCE OF ADVANCED TV

Advanced TV is a new type of TV that offers enhanced features and capabilities. Advanced TV is still in its early stages, but it is expected to grow in popularity in the coming years. This new type of TV provides advertisers with an opportunity to create even better and more immersive ads.

TV’S MULTIPLIER EFFECT ON OTHER MARKETING CHANNELS

TV advertising not only helps to build brand awareness, but it can also drive results in other marketing channels. For example, TV advertising can help to increase website traffic and search engine rankings. TV ads can also lead to an increase in social media engagement and sales. In a recent poll, 89 percent of marketers said they believe that TV advertising has a positive impact on their other marketing channels.

THE BEST STRATEGIES FOR BUILDING YOUR BRAND WITH TV ADVERTISING

FOCUS ON A NICHE OR CATEGORY

When it comes to TV advertising, it is important to focus on a specific niche or category. This will help you to create ads that are more relevant and targeted to your audience. Being to general with your ad campaign will make it less effective.

TAKE YOUR BUDGET FURTHER WITH REMNANT ADVERTISING

Remnant advertising is a type of TV advertising that allows you to buy ad space at a lower cost. This is because remnant ads are typically sold at a discounted rate. This can be a great way to save money on your TV advertising budget.To get the best placements and rates, we recommend partnering with The Remnant Agency, an advertising agency that specializes in these types of ads and has the best relationships with publishers.

USE PROGRAMMATIC TV ADVERTISING

LEVERAGE CONNECTED TV ADVERTISING

EXPERIMENT WITH INTERACTIVE TV ADVERTISING

HOW ARE ADVERTISERS TRACKING TV AD SUCCESS?

TV advertising is more effective than ever, but advertisers still need to be able to track the success of their campaigns. Advertisers are now using a variety of methods to track TV ad success.

These methods include:

- Using data from social media platforms, such as Twitter, to track the reach and engagement of TV ads

- Using Nielsen data to track TV ad awareness and brand recall

- Working with third-party measurement firms, such as Integral Ad Science, to track the effectiveness of TV ads

- Using Google Analytics to track website traffic that is driven by TV ads

As you can see, there are a variety of ways that advertisers can track the success of their TV ad campaigns. By using these methods, advertisers can make sure that their TV advertising is effective and efficient.

Although online advertising is growing, it’s still not as effective as TV advertising when it comes to building a brand. The bottom line is that TV ads reach more people and generate more awareness for brands than any other form of advertising. If you want your brand to be seen by the most people and make the biggest impact, then you need to invest in TV advertising. Have you tried using TV ads to build your brand? What results did you see?

Source: bignewsnetwork.com

AD SKIPPING RESTRICTIONS RETURNED TWO THIRDS OF GRPS

Media Club is satisfied with the introduction of ad skipping restrictions in the return view of IPTV operators, according to the first month results. According to Prima Group commercial director Vladimír Pořízek, about two first of GRPS ad returns have been made.

Since June, the Prima TV group has restricted the possibilities for skipping ads in the backview of IPTV operators. The introduction was justified by the need to protect advertising space following the growing share of video-on-demand viewership and the increasing popularity of internet TV, which, thanks to its back-viewing functionality, allows the viewer to watch programmes according to his or her time options, as well as skipping broadcast programmes, including ad breaks. Prima said that this trend would further weaken its advertising capacity in the future. After the first month of experience, commercial director Vladimír Pořízek says the restrictions have prevented the outflow of about two-thirds of advertising GRPs, thanks to the Media Club’s representation.

There is a growing concern about the future development of inflation, the impact on the cost of living and consumer behaviour. Are these developments having an impact on TV autumn campaign bookings? Are you registering reduced demand compared to the pre-holiday period?

We are not seeing a drop in demand yet. Commissioning companies learned to live with the fact that despite the restrictions, people had saved up and so the impact of these measures was not felt in sales. Consumer confidence may be down now and people are getting worried, but we are not seeing big changes in the behaviour of the sponsors yet. There are concerns and it looks like the crisis is knocking on the door. Yes, we are all preparing for it. But still, we saw it during the period of covid, when there was no crisis at all. Clients have the money so far and are planning their autumn campaigns. People still have savings and unemployment is still almost zero. The attitude of the government will be important. If it helps people financially and sort out energy prices, it is quite possible, in the most positive scenario, that there will be no major crisis. On the other hand, we do not know what will happen next, when people start receiving new bills or factories really start closing down as a result of the gas shortage, and it is premature to draw a picture for 2023. It depends on a lot of factors. We are working with different scenarios, but at the moment we do not know exactly what will happen from January.

Do you at least have an idea of what the price of TV advertising might look like for 2023, given that advertiser interest is high and advertising space is full?

Demand is strong, ad space is filled, and most importantly, GRPs are dwindling in linear TV, thanks to more competition from VOD services. In addition, our cost of entry is rising. All of these circumstances then translate into our pricing, which is why we plan to increase advertising prices for 2023.

And by how much? ASMEA estimates inflation in TV for this year at 10-15%, with general inflation at 20%…

I believe it will be at a similar level to last year (increases in the range of 11-16%, ed.). However, we are still monitoring market developments and will decide accordingly. Clients have the money so far and are planning their autumn campaigns. We will increase advertising prices for 2023.

When you presented the AdCross cross-platform measurements this spring, you outlined the trends for the next few years, which showed, among other things, that the GRP volume in linear TV broadcasting will decrease. Did you register a reduction in GRPs in the first half of 2022 compared to the first half of last year?

Yes, of course. Moreover, the trend has also intensified due to the fact that in the past years, TV viewership has increased due to the covid, while after the covid measures were lifted, it has declined steeply, and this is reflected in the lower number of linear GRPs. We cannot yet say how the launch of the additional pay video platform Disney+ in June has affected the number of GRPs. We have been helped by the introduction of restrictions on ad skipping in rewind viewing by IPTV operators from June. As a result, an interesting proportion of our GRPs have returned. But the trend is clear: we expect GRPs in linear TV to continue to decline in the future. It’s just a matter of how fast it will be and how it will be reflected in different audience groups. The more VOD services on the market, the more time people will spend on them, which will amplify the decline in linear GRPs. People have learned to pay for VOD services during covid, which is also a new thing, as there has long been scepticism about whether Czechs would be willing to pay for video content on the internet.

In June, you introduced restrictions on skipping adverts in rewatching for IPTV operators. So how many GRPs did you get back in July?

Two-thirds of the GRPs came back. Most operators are able to take advantage of not having to run full length ad spots as on linear TV, but shortened to about 3 minutes during the break. However, not all operators have been able to adapt their systems and implement these measures in this way. Two thirds of the returned GRPs represent over 2 thousand GRPs per month.

The trend is clear: we expect GRPs in linear TV broadcasting to continue to decline in the future. It’s just a matter of how fast it will be and how it will affect different audience groups.

Will there be any more changes to the functionality to limit ad skipping?

The functionalities remain the same for 2023. Our aim is to integrate operators into cross-platform viewership measurement. We are now inserting online advertising with three operators: betterTV (GoNet), Sledovani.tv and Grape. Crossplatform measurement will allow us to better target viewers and deliver better affinity to our clients on their campaigns.

And that should happen when?

We are working hard on the implementation now with BetterTV and Sledovani.tv and hope to deploy crossplatform measurement in the next 3-6 months.

During the last few years, the advertising market has been affected not only by covid, this spring the war in Ukraine has started. Have these events affected the behaviour of advertisers in different segments?

There were two problems during the covid era: some advertisers couldn’t sell and so had nothing to advertise, and the other group that could sell stopped needing advertising because people had nowhere else to spend their money and so their sales skyrocketed. Moreover, people also saved a lot of money during covid and started to spend it as the restrictions loosened up, even though inflation was flying upwards.

When it comes to Ukraine, advertisers did not want to place ads next to war programmes. So we had to withdraw selected programmes from the Prima Zoom channel, where we regularly include war documentaries in the programming schedule. It also affected news websites, which of course covered the war a lot, and not many advertisers wanted to be associated with that. As a group, however, we did not see a decline in overall advertising volume in the first half of the year.

Given the expected trends we’ve talked about, you’re trying to push eGRP sales into the market. What is their current share in the 15-69 target group?

So far, it’s only units of percentages. We are still at the beginning, we have to teach the market to trust eGRPs. We now have data that confirms that with eGRPs we can target younger target groups, women in particular, well and increase the affinity of campaigns.

One last question on the commercial policy for 2023. In the spring you talked about putting some of the advertising space up for auction. Is that still valid?

We will only auction part of the TV advertising space if there is excess demand. We process agency negotiations through special software in which each media agency can see the agreed terms and their parameters. The targets are set there for each client. If there is an excess of demand, it could happen that agreements with the lowest CPP value fall into the auction if they are not concluded in time. Absolutely every client will have the opportunity to close the deal in the standard way, but they must respond in a timely manner. However, if clients or agencies are speculating and there is an excess of demand over supply, it may be that they will overbid. We have already turned down several clients in the past year because their price was extremely low. However, this may not happen at all. In addition, we sell a very small portion of our GRPs in the so-called monthly auction if we are not sold out in a given month.

Zdroj: mediaguru.cz

HBBTV UNVEILS JURY FOR HBBTV AWARDS 2022

The HbbTV Association, a global initiative dedicated to providing open standards for advanced interactive TV services through broadcast and broadband networks to connected TV sets and set-top boxes, is pleased to announce that the jury has been appointed for the HbbTV Awards 2022.

The jury members are:

Nicole Agudo Berbel, ProSiebenSat.1
Robert Briel, Broadband TV News
Paul Gray, Omdia
Vincent Grivet, HbbTV Association
Marc Hankmann, Freelance Journalist
Andre Prahl, RTL Deutschland
Leslie Shanklin, Discovery
Martina Vojtěchovská, MediaGuru.cz

“We are proud about the excellent panel of high-profile industry executives and experts assessing the entries for this year’s HbbTV Awards. The contest provides a unique opportunity to showcase the latest best-in-class examples of applications and services enabled by the HbbTV specifications. I am, as always, very excited to review the Awards entries which give an outstanding and privileged insight into the market dynamics of HbbTV,” said Vincent Grivet, Chair of the HbbTV Association. “I would like to encourage all industry players to submit their entries for the connected TV industry’s most respected award.”

The categories for the HbbTV Awards 2022 are:

Best use of HbbTV for advertising-based solutions
Best tool or product for HbbTV service development or delivery
Best technology innovation in an HbbTV product or service
Best interoperability and conformance tool
Best marketing or promotion of an HbbTV-based service
Best individual contribution to the HbbTV Association
Judges’ award “HbbTV newcomer of the year”

The providers of HbbTV applications and services are welcome to submit their entries through this online form; the website also details the terms and conditions of the free competition. A company may enter into as many of the categories as they like. Each submission will require a separate form to be completed. Entries will be judged on their execution, impact and innovation. The closing date for submissions is September 15, 2022. A shortlist of finalists will be put forward to the jury who will select the winners. The finalists will be announced by October 15, 2022.

The HbbTV Awards are held for the fifth time, showcasing and celebrating best practice and excellence in the HbbTV community. The prizes will be awarded at a prestigious ceremony on November 9 as part of the HbbTV Symposium and Awards 2022 in Prague, jointly hosted by the HbbTV Association and the Czech Association of Commercial Television (AKTV). All finalists are invited to attend the awards ceremony.

Contact HbbTV Association:
Angelo Pettazzi
Chair HbbTV Marketing and Education Working Group (MEWG)
email: angelo.pettazzi@kineton.it
Tel: +39.335.7614.596

Press Contact:
Thomas Fuchs
Fuchs Media Consult GmbH
email: tfuchs@fuchsmc.com
Tel: +49 171 4483 168

About the Czech Association of Commercial Television
The Czech Association of Commercial Television (AKTV) was formed in 2017 as an association of terrestrial television broadcasting operators with the goal of defending, supporting and promoting the common interests of commercial broadcasters in the Czech Republic. The founding members of the Association are the Nova, Prima and Óčko television networks. More information: www.aktv.cz

Contact Czech Association of Commercial Television:
Marie Fianová
AKTV Secretary
email marie.fianova@aktv.cz
Tel: +420 724 442 935

PRIMA WANTS TO INCREASE MARKET SHARE WITH AUTUMN SCHEME

New shows in the autumn schedule of TV Prima’s main channel should contribute to a further increase in the Prima Group’s share of the TV market, believes CEO Marek Singer.

Three new prime-time series or a new entertainment show will appear on the Prima Group’s main channel this autumn. Among the new series, there is the Pálava series, which is loosely based on Vinaři, as well as the Hořký svět series, which introduces the environment of a microbrewery, and Dobré zprávy, which is set in a TV background. The licensed entertainment show Můj muž to dokáže will also premiere, in which men perform bizarre tasks and their wives bet on their performance. At the same time, the premiere episodes of ZOO, the most watched show on TV Prima last season, will continue. With the new shows, Prima hopes to at least maintain, but better yet increase, its share of the ratings. In last year’s autumn season (1 September-31 December 2021), the Prima group achieved a share of 26.76% in the 15-69 audience group, up one percentage point year-on-year (source: ATO-Nielsen Admosphere).

Marek Singer, CEO of the Prima group, also notes that all the main TV channels have prepared for the autumn season and that Prima’s broadcasts will not be without a preponderance of original shows. Prima has also started production for its upcoming pay video-on-demand (VOD) platform, which it plans to launch this autumn. It is thus arming itself with production on two fronts. “Investing in original productions today is a ticket to the game and also to the future. Local content is crucial,” he says in an interview.

The autumn scheme of the Prima group’s main channel is generally set in a rather optimistic and positive tonality, which is also underlined by the campaign slogan “Life filled with sunshine” that accompanies the launch of the scheme. Was this the intention?

It is our intention. By nature, we believe that television is primarily a relaxing medium. Although all the emotions it brings are not always positive, in our view they should prevail. Added to this is the fact that the mood in society is not cheerful because of fears about future developments. This makes the audience all the more eager to see something optimistic on the screen.

For example, of the original detective shows that have flooded TV screens in recent years, you don’t have any this autumn…

It’s true, we don’t have any detective shows this fall, but that’s also due to the competition’s programming. If Czech Television and Nova are tuning their Mondays into the detective genre, it doesn’t make sense for us to come up with another detective series. We have the experience from last autumn, when we broadcast a series from a rural environment told with kind humour on Mondays – Hvězdy nad hlavou. It worked well because it was complementary to shows on other stations. Not all viewers are fans of crime dramas, and rather than go with another similar series, it’s better to choose an alternative.

Do you have experience from earlier years that Prima’s audience is more likely to seek out more comedy and family-oriented types of shows, and that you hit your audience more with that focus?

We are convinced of that. We know from various segmentation studies on TV viewers that Prima is perceived as a friendly and family-oriented TV station. This perception does not arise on its own, because it is linked to the expectations that viewers have of us. That is why a dark Nordic-style series will not be so successful on our air, but will be watched on Czech TV because that is where viewers expect it. It has to do with a strategic decision and with positioning how to profile ourselves to the viewer.

“If Czech Television and Nova are tuning Mondays to the detective genre, it makes no sense for us to come up with another detective series.”

You are launching three new series this autumn, are continuing with ZOO and are also launching a new entertainment show. What are your expectations for the fall in terms of ratings?

In general, we expect to be at least as successful as last fall.

So the goal is to achieve a comparable share or ideally higher…

Yes, ideally we would like to get more. It may sound immodest, but we can see that all three major TV stations have prepared for this autumn and the competition is increasing. We’re building on the success of last autumn. We’ve strengthened the schedule from last year, so if we can do comparable to last year or even a little better this year, we’ll be happy.

Any guesses on how your newcomers will do?

That’s a tough one, because you have to factor in what times and against what shows they will be aired. Hořký svět could make it, Pálava builds on what our viewers already know from the series Vinaři, and that’s also an important thing. But I find Monday night very difficult, because it is competitively charged.

And then there’s the new addition for Friday nights, the fun show Můj muž to dokáže. What should we expect from it?

We are very curious to see how this new show will fare. It hasn’t been easy to come up with a strong entertainment format in recent years. We like the concept and the execution, and now it’s a question of whether the audience will like it too. In the German market, which is probably the most similar to the Czech market in terms of audience preferences, the show has worked very well.

Do you have the feeling that it is already difficult to throw in new things in reality shows, which are represented in the evening broadcasts of TV Prima, for example by the tenth series of the Česko Slovensko má talent competition? Is there still room for these shows?

There is still room, because not all of the world’s reality shows have been broadcast here yet. But we have to distinguish what type of reality show we have in mind. Are we talking about daytime shows like Prostřeno! or big evening formats that are broadcast only once a week. We’re constantly evaluating different possible new shows, but it’s not easy because a good format and good casting have to come together. But we will definitely try to try new reality shows because the format is and will be popular.

Over time, the programming schedule of the main channel is increasingly based on Prima’s original shows, which was not the rule a few years ago.

There is no other way. The covid pandemic has accelerated the use of foreign video services among a relatively large part of Czech viewers. We cannot think that we will be successful with mostly foreign acquisitions. That time is gone.

“We cannot think that we will be successful with mostly foreign acquisitions. That time is gone.”

But this has implications for the costs you put into production.

Of course it does. That’s the ticket into the game today and into the future. Local content is the key. For providers like Netflix or HBO Max, the Czech market is too small to develop the kind of local programming here in the volume that local players will bring. Just considering how many hours of premium prime-time programming each of the three main TV stations in the Czech Republic has to produce today in order to make it in the market, this is indeed a significant volume from the perspective of a global operator, given the size of our market.

In the case of the upcoming pay video platform, do you plan to shoot only for VOD or do you foresee a symbiosis with linear TV?

I am convinced that the symbiosis is necessary for purely economic reasons. The way we see it is to offer on VOD what viewers didn’t or couldn’t watch on TV, and to prepare content that was created for VOD. But I don’t think we will keep shows exclusively for VOD forever. In order to make it work economically, content from original productions for VOD will be used elsewhere later.

So you’re already producing shows just for VOD?

We’ve produced them already and they are ready to go in the autumn. We will announce the details when the time is right.

And how many shows will you launch to attract a strong enough following?

It’s very difficult to just give a number, it will be all about showing a diverse range. The second question is how often to renew the shows and offer new ones. We know from our experience in the German market that viewers on pay VOD services mostly watch content that was running on TV and that they didn’t manage to watch, i.e. catch-up. It still accounts for the majority of viewership. Original VOD shows are important, but there are fewer of them. A look beyond our borders shows that broadcasters in the UK or Germany make about ten per cent of their output purely for VOD. And these are markets where the penetration of VOD services is much higher than here. So we see that ratio of VOD to linear production somewhere around 1:10 or 1:15.

“I don’t think we’re going to keep shows exclusively for VOD forever. In order to make it work economically, the content from original creation for VOD will be used elsewhere later on.”

Are there enough creators here in the Czech Republic?

Based on what we have prepared and are preparing, I don’t feel like there aren’t. Of course, it depends on the quality. Producing shows for VOD forces us to experiment and go a bit further, because viewers expect something a bit different from VOD than from linear television.

Is there a proportionality also between the cost you need to produce original content for VOD? I mean, is it a tenth of what you need to produce shows for linear TV?

I can’t say yet, we’re in a different situation because we’re investing in a start-up now. Moreover, VOD is an investment with more distance, because shows are produced even further in advance than for TV. Understandably, we are now seeing the cost of making shows increase.

Will the investment you put into producing VOD content be recouped from advertising and subscriptions?

Our plan is calculated in a way that they should, even with less than one million subscribers. But it’s very dependent on how the content primarily produced for VOD or in time for VOD can be marketed on TV. We expect linear TV to remain strong over the next three to five years. But what happens in the market in the next three years will be really interesting.

Do you think you’re late to market with a pay VOD service? Your competitor Voyo has more than a year’s head start and other foreign players have entered.

I don’t think so, because our competition is neither Netflix nor HBO Max, but Voyo. But if there’s room for two TVs in the market, I don’t see why there shouldn’t be room for two VOD services. We know from surveys and from other countries that viewers choose based on the specific content they want to see. That means they jump between services based on their current offerings. If there was only one VOD service offering all quality local content, viewers would go there. But if there are more than one of those services, they’ll make their choices based on what they want to see. So they don’t have to pay for two or more services at once. An example in the US right now is Game of Thrones. Viewers pay a subscription, watch the show and leave.

Which of the subscription types under consideration – with and without advertising – will be stronger?

It also depends on the economic conditions and the situation in the country. Six months ago, I would have said that people would subscribe more to the more expensive versions without ads, but given the rising prices and the uncertain economic outlook, the cheaper version with ads will probably be more attractive.

One last question, which is not about the autumn broadcast and the preparation of shows for the VOD service, but about the debate on the financing of Czech Television. How would you, as representatives of the commercial sector, position yourself if, in theory, there could be an increase in advertising on Czech Television?

I think that an increase in advertising on Czech Television at a time of an emerging economic crisis is not a solution for Czech Television. There will be less advertising money and the volume that Czech Television needs to raise from the advertising market will not be raised anyway. However, I think it is right that Czech Television should demand the same licence fees from viewers of its online content as it demands from those watching television.

Marek Singer has been CEO of Prima Group since March 2008 – with a break from January 2013 to May 2015, when he was Executive Vice President of MTG for Central and Eastern Europe. He spent the first eight years of his career with Unilever in Europe and in the United States. In 2002, he spent four years as Marketing and then Sales Director at Masterfoods. In the following two years he worked as Sales and Marketing Director at Karlovarská minerální voda with responsibility for the Czech Republic and Slovakia.

Source: mediaguru.cz

GROSS INVESTMENT IN ADVERTISING GREW BY 13% IN SEVEN MONTHS

Gross investment in the purchase of advertising space in the media increased by almost 13% in the first seven months of the year.

Gross investment in media ad space increased by almost 13% in the first seven months of the year, according to AdIntel’s monitoring of Nielsen Admopshere. Television advertising remains the strongest in terms of volume, with outdoor advertising posting the highest year-on-year growth so far this year (+27%). However, all monitored media types show double-digit growth.

In July, however, year-on-year increases were lower and in the case of outdoor advertising, investment even fell slightly. Kaufland, Simply You and Lidl were the strongest advertisers in July.

Investment in internet advertising does not appear in the overview of monitored investments, because the internet is represented in the monitoring only by some formats and thus does not cover the complete expenditure in internet advertising.

Again, we would like to point out that the monitored investments do not correspond to the actual investments that flow into the media for buying advertising. However, they do indicate a trend.

Source: mediaguru.cz

WARC PREDICTS AN ADVERTISING INVESTMENT SLOWDOWN IN 2023

Brands will continue to invest in advertising in the second half of the year, but warc expects a slowdown in 2023.

Ad spend around the globe will rise 8.3% in 2022, before slowing significantly in 2023 – in a major new report, WARC downgrades expectations for global ad market growth by $90bn in the face of a wider economic slowdown. These are the figures presented in WARC’s Ad spend Outlook 2022/23: Impacts of The Economic Slowdown. You can read a sample here. WARC Media subscribers can access the full report here.

The report notes following facts:

Global ad spend is set to reach $880.9bn this year – a rise of 8.3% or $67.3bn. This is largely down to cyclical boosts from major events like the US midterm elections and the men’s FIFA World Cup, both taking place in November, which will animate H2 growth. Big brands appear to plan to sustain their spend.

However, growth is set to slow significantly to just 2.6% in 2023. WARC is thus cutting its original 2023 outlook from last December by 5.7 percentage points. A significant reduction in investment is also estimated for social media. Investment in social media advertising is set to grow by 11.5% this year, but this is well below the 2021 figure (+47.1%). In 2023, it is set to grow by just 5.2%, the lowest ever for this category. Apple’s privacy measures are also expected to play a role. This also applies to YouTube, where advertising investment is expected to increase by 5.6% in 2023.

Investment on ad-supported video platforms (AVOD) is expected to increase slightly faster. Broadcasters are also expected to see an increase in advertising revenues this year (+9.7%) and 5.2% next year. Higher revenues are also expected for linear TV this year (+3.6%), but a decline of 4.5% is forecast for next year.

“With the rate of growth in global output now halved and supply-side pressures fuelling inflation, the economic slowdown has slashed nearly $90 billion from the global advertising market’s growth prospects this year and next,” notes James McDonald, Director of Data, Intelligence & Forecasting, WARC. But he adds that brands are still investing for now as the post-Covid recovery continues.

Source: mediaguru.cz

NEW CONTENT ON TV NOVA WILL BUILD UP IN 2023

The advertising autumn on TV Nova has been promising so far. The investments the TV group has made in the preparation of the programme should bear fruit not only this autumn, but especially next year, says Jan Vlček, CEO of TV Nova.

Last week, the Nova Television Group presented its autumn scheme, from which it hopes to increase its viewership. It has even greater expectations for 2023, when it will introduce a number of new shows, which are now in production, to its linear broadcasting and to the paid offer of the Voyo video platform. Specifically, dozens of original feature projects, including TV Nova’s first ever period drama with the working title Obchodní dům, the return of Kriminálka Anděl, and the family series Jedna rodina from the pen of Lucie Konečná. CEO Jan Vlček, one of two CEOs of the Nova Group who is also its Chief Commercial Officer, therefore expects 2023 to push the group further in terms of ratings.

He also has optimistic news in his interim outlook for this autumn. In terms of advertiser activity, Nova does not observe that clients are putting the brakes on their plans for TV advertising campaigns under the influence of economic developments. “Most clients are closing larger volumes than last year,” he describes in an interview after the press conference on the autumn scheme.

With the start of the TV autumn just around the corner, it is impossible not to ask how you perceive the advertising market situation and how clients’ interest in advertising in the autumn months is developing. Do you see a caution in the outlook for advertising clients in the wake of economic developments?

We are watching very carefully for any signs of potential caution and in our discussions with clients we are interested in how their business is developing and whether they are planning any adjustments in their communications. So far, however, we are finding that the trend is rather the opposite and most clients are closing larger volumes than last year. So we do not observe any slowdown. It’s not that we don’t see caution as clients are making it clear that they are preparing for various eventualities so that they are ready if their demand is negatively impacted. But so far they have not felt the impact on their business and so far the current economic situation has not had a negative effect on the size of communication budgets, quite the opposite.

Do you have any justification for this?

I think a lot of clients have learnt their lessons during the time of covid. They have got used to living with a certain degree of uncertainty and are able to prepare alternative scenarios and switch to them when they see fit. Thus they do not create for themselves a panic of uncertainty.

ASMEA, the professional grouping of media agencies, estimates that the rate of TV inflation will be between 10-15% this year. Do you have any idea how Nova Group’s TV advertising prices may change for 2023?

We don’t have anything approved yet, but we can all see how prices are evolving. The impact that inflation has on our inputs must be reflected in the price level for next year. We will also see how the demand for TV advertising develops for next year. Of course, if it were higher, it would push the price further up.

“So far, the current economic situation has not had a negative effect on the size of communication budgets, quite the opposite.”

If we go back to the same period a year ago, at the press conference for last autumn you announced your plan to launch a female channel Nova Lady. Did it fulfil what you expected from it in your portfolio of stations?

With the launch of Nova Lady, we achieved the stratification of our channels that we needed from a socio-demographic perspective. Now we are still working on its stronger distribution. But the new channel is so far meeting expectations given the level of current distribution. Alongside the launch of Nova Lady, we have also redesigned the Nova Action and Nova Fun channels. We are also working on Nova Gold. We are continuing to work on these four channels so that they are more complementary and overlap as little as possible. Nova Lady is intended primarily as a channel for working-age women, Nova Fun as a channel for a younger female audience, Nova Action is aimed at men and Nova Gold primarily at middle-aged women.

What exactly do you want to improve about the distribution of Nova Lady?

We want Nova Lady to be distributed like our other free-to-air channels. So we are in talks with operators to include the channel in their offer.

And are you planning to launch another new thematic channel?

We are not working on another free-to-air channel project at the moment.

Do you see the Voyo paid streaming service and its tie-up with linear channels as strategically important now?

Our primary intention is to capitalise on the large amount of content we are producing and developing in the coming year. We’ve currently unveiled our autumn line-up and also announced a number of shows we’re preparing for 2023. It’s in the next year that the major influx of new content will come. That’s a key priority. This autumn will be a strong one, we expect to see an increase in viewership, and we want to move even higher in viewership in 2023.

“This autumn will be a strong one, we expect to see an increase in viewership, and we want to move even higher in viewership in 2023.”

Won’t both platforms be “eating” each others’ viewers?

We clearly see that Voyo and linear TV are not competing, but complementing each other. We see linear TV acting as a driver of new subscribers for Voyo. These are shows that viewers watch on TV and like so much that they want to see them in their own mode. Or, conversely, linear TV acts as a way of promoting formats that can only be watched on Voyo.

The question is whether you will incorporate the shows you plan for Voyo into linear broadcasting…

Our idea is that projects that are exclusive to Voyo will stay on Voyo. We don’t rule out that they won’t be on linear TV in a few years, but we don’t foresee them being on linear TV after, say, one year.

You’ve indicated several times that Voyo has more subscribers than you’ve projected for this time period. What is the current state of play?

We recently disclosed that Voyo has more than 350,000 subscribers. The number is gradually increasing, plus now the autumn season is starting, which is an incentive for new subscribers. We estimate that Voyo is now the number two in the market after Netflix, although we don’t know the exact numbers on Netflix and are basing them on our calculations. Local content is key, and it’s hard for any foreign player to compete with us there.

“We estimate that Voyo is now number two in the market after Netflix.”

And in terms of investment? Is the money invested in building the Voyo platform coming back?

We have set a five-year plan that is calculated to be profitable when we reach one million subscribers. I believe that target is realistic. If we look at the penetration of paid streaming video services (SVOD, ed.) in the Czech market, we are at around 25%. In the West, however, the level of this penetration is at least double, so there is still room for growth in our SVOD market.

Is it still true that the biggest draw on Voyo is Ordinace v růžové zahradě?

I think that’s an oversimplification. You can hardly compare a series that runs for a long time with a series of three or four episodes. Obviously, Ordinace v růžové zahradě delivers very valuable content with a loyal audience, continuously forming the backbone of a stable subscriber base. However, building Voyo on Ordinace v růžové zahradě alone would not work. In fact, viewers gradually get used to the exclusive material Voyo offers, which then becomes an attraction for other new subscribers.

So, are you thinking of returning Ordinace v růžové zahradě to linear broadcasting?

No, that’s not on the cards.

In terms of selling advertising and adding target audiences on the internet and in linear TV, we are faced with the fact that we still don’t have a single currency for measuring video content…

As for Voyo, we don’t want to sell advertising there. In the case of ad-supported video, i.e. AVOD, which is represented in our offer by Nova.cz, there are projects in the works within the ATO that would be able to measure the total reach of video. However, we are already trading incremental reach with clients that can attribute video views to a TV campaign.

Looking at the Nova Group as a whole over a number of years, how much of the turnover can SVOD, represented by the Voyo service, bring to the Group?

It is difficult to express a percentage share because we do not know how revenues from other sources will develop. But SVOD should be one of the pillars on which we want to stand in the future. It certainly won’t be key in the foreseeable future, as advertising revenue will still be the foundation. However, alongside advertising and SVOD, distribution revenues are also developing interestingly and it is our task to diversify our revenue sources in the future.

Source: mediaguru.cz

ILLEGAL DOWNLOADING OF COPYRIGHT WORKS FROM THE PERSPECTIVE OF CRIMINAL LAW

Probably every internet user has downloaded a movie, song or photo for their personal use. The more proficient ones may have even downloaded a computer programme (e.g. a computer game). Of course, there are files that are not subject to copyright, but we usually face a problem that a given file is a work within the meaning of Section 2 of Act No. 121/2000 Coll., the Copyright Act (hereinafter referred to as the “Copyright Act”). Does a user who downloads a copyright work from an illegal source commit an illegal act and, if so, can illegal downloading be punishable under criminal law?

Nowadays, there are many paid legal online platforms with access to copyright works (especially movies and TV series) such as Netflix, HBO GO, Disney+, etc. Another way to access computer files is via data storage services such as Ulož.to. Works available in such repositories are often of obscure origin and apparently lacking a license to download them but are available for free. Finally, there are sites where the uploaded copyright content is clearly illegal, in particular domains allowing torrent downloads and operating on a peer-to-peer basis (i.e. data flows directly from individual users to other users). The police are actively trying to eliminate these platforms but their work is complicated by the fact that these sites are often global and their originators are not easy to trace.

The question of whether downloading copyright content for personal use is permissible has been addressed by the Supreme Court in the past. The Court has held that the making of a copy of a copyright work solely for personal use within the meaning of Section 30 (1) and (2) of the Copyright Act does not constitute an unauthorised interference with copyright and related rights. At the same time, the Supreme Court has held that the Copyright Act does not preclude the legal making of multiple copies for personal use, provided that this does not interfere with the normal use of the work and does not prejudice the legitimate interests of the author. In the opinion of the Supreme Court, it is irrelevant from which source the copy is made for personal use, i.e. it may be obtained illegally (e.g. by downloading the copyright work from the internet). However, it must not be a copy of a computer programme, since the making of a copy of such copyright work is excluded by the Copyright Act in Section 66.[1]

No wonder that the general public still believes that there is nothing wrong with downloading from the internet for personal use when the Supreme Court has taken the same view. But the aforementioned case law has now been overtaken by the case law of the Court of Justice of the European Union (the “Court of Justice”). The Court of Justice expressed the view that the illegal making of copies, albeit for personal use only, could not be subsumed into the exception allowing it. The Court of Justice justified its conclusion by stating that a restrictive interpretation must be applied in creating exceptions to copyright since the copyright which is being interfered with in this extraordinary manner permitted by law is a right of an absolute nature. The Court of Justice further pointed out that in the event of illegal downloading of a copyright work, the author cannot obtain adequate compensation, and therefore downloading from illegal sources, even for personal use, must be discouraged.[2]

The Court of Justice emphasised the necessity of applying the so-called Berne three-step test, which can be considered a material condition for the non-contractual use of a work that must be fulfilled in addition to the individual statutory licences stipulated by law (formal condition). The three conditions that must be fulfilled for the admissibility of an exception to copyright in favour of the making of copies of a copyright work for personal use are as follows:

1) It is a special case provided for in the law.
2) The use of the work must not conflict with the normal use of the work.
3) The legitimate interests of the author must not be unreasonably prejudiced.

The Court of Justice held that even if the first two conditions of the test are met, downloading copies from illegal sources can never satisfy the third condition of the test, since authors do not receive compensation when works are downloaded from illegal sources and this ipso facto excessively affects the legitimate interests of the author. In view of the above, it can be concluded that downloading copyright content from illegal sources is unlawful.

But can such conduct be punished under criminal law?

The case law focuses exclusively on communication of the work to the public (uploading works to the internet without the author’s permission) and not on downloading. This stems primarily from the lower social harmfulness of downloading. It is treated more benevolently by the law enforcement authorities in accordance with the principle of subsidiarity of criminal repression as the act does not reach such social harmfulness that it could not be resolved within the limits of civil law or administrative law remedies.

Yet, illegal downloading could accomplish the facts of Section 270 of Act No. 40/2009 Coll., the Criminal Code (hereinafter referred to as the “Criminal Code”). This provision reads as follows “Whoever unlawfully interferes not insignificantly with the legally protected rights to a copyright work, an artistic performance, an audio or audio-visual recording, a radio or television broadcast or a database shall be punished by imprisonment for up to two years, prohibition of activity or confiscation of property or other material value.”[3] For the sake of simplicity, I work only with the term copyright work in this article but my conclusions are fully applicable to other rights related to copyright within the meaning of Section 270 of the Criminal Code.

As I stated above, the condition of interference with protected rights in a copyright work will be met in the case of downloading and thus the interpretation of the phrase “not insignificantly” will be key. The interference must be not insubstantial in order to satisfy the facts of the crime. The commentary literature on the subject states that each case must be assessed individually, in particular taking into account the intensity of the interference with the legally protected rights, the manner in which the act was carried out, the consequences of the act in terms of the authors’ personal and property rights, and whether the interference was an isolated incident or whether it was of a long-lasting or repetitive nature. Last but not least, it will be necessary to assess the perpetrator as a person, the manner and degree of their culpability, their motivation and whether they have committed a similar act in the past.[4]

It should be noted that the condition of not insignificant interference will generally not be met in the case of downloading a work by the end user since the damage caused by downloading, for example, one film is only in the order of crowns. The Supreme Court has held that the calculation of damages must be based on the amount that the copyright holders would have received if they had legally made the downloaded content available in a comparable manner (e.g. through online video rental services in the case of films and series) and that the amount of lost profits cannot be calculated from the usual price of the tangible medium (e.g. DVD).[5]

At the same time, it is more profitable for copyright holders to claim compensation from the operators of web platforms or the persons who uploaded the work to the internet than from the users who downloaded the work. Individual users cause only minor damage by downloading the work and it would be economically disadvantageous and technically virtually impossible to claim damages from each of them. Moreover, on 7 June 2021, Directive 2019/790 of the European Parliament and of the Council of the European Union came into force [6], which, among other things, imposes new obligations on providers of online content-sharing services. The Directive imposes an obligation on service providers to make “best efforts” to prevent the dissemination of copyright-infringing content, which is the only way for them to exclude their liability.

However, as I outlined above, it can be problematic for ordinary users when a user downloads a torrent file. At the moment of downloading, the user is also sending the data to other users, thereby reproducing the work further.[7] Any user is thus a potential accomplice in the crime, not primarily because of the downloading of the work itself but because of the further sharing of the work. The joint conduct of multiple users may satisfy the “not insubstantial” copyright infringement requirement.[8]

What are the real penalties for illegal downloading of copyright content on the internet?

It can be concluded that downloading copyright works will only cause an insignificant infringement of copyright, i.e. if the user does not download torrent files and does not share them further, they do not have to worry about criminal sanctions. However, the conduct may qualify as an offence under the Copyright Act. Section 105a (1) (a) of the Copyright Act applies to the downloading of a copyright work, and under this provision a fine of up to CZK 150,000 can be imposed for unauthorised use of a copyright work. Theoretically, this includes any interference with an author’s work that does not reach the intensity of a “not insignificant” interference. Thus, on a purely formal level, the user commits an offence every time they download copyright content from an illegal source. However, on a practical level, the competent authorities do not pay attention to downloading content from the internet and I am not aware of a single case where a user has been fined or even prosecuted for downloading copyright content for their own use.

Mgr. Bc. Václav Pindur

Advokátní kancelář Brož & Sokol & Novák s.r.o.

Sokolská třída 60
120 00 Praha 2

Tel.: +420 224 941 946
e-mail: advokati@akbsn.eu

[1] Resolution of the Supreme Court of 25 March 2009, file no. 5 Tdo 234/2009
[2] Judgement of the Court of Justice (Fourth Chamber) of 10 April 2014, ACI Adam BV and Others v Stichting de Thuiskopie and Stichting Onderhandelingen Thuiskopie vergoeding, file no. C-435/12
[3] Provisions of Section 270 (1) of Act no. 40/2009 Coll., the Criminal Code, as amended
[4] ŠČERBA, Filip. Section 270 [Infringement of copyright, copyright-related rights and database rights]. In: ŠČERBA, Filip a kol. Criminal Code. Commentary. Prague: C. H. Beck, 2020, p. 2152
[5] Resolution of the Supreme Court of 8 October 2014, file no.: 5 Tdo 171/2014
[6] Directive (EU) 2019/790 of the European Parliament and of the Council of 17 April 2019 on copyright and related rights in the Digital Single Market and amending Directives 96/9/EC and 2001/29/EC
[7] Provisions of Section 13 of Act no. 121/2000 Coll., the Copyright Act, as amended
[8] SKUPIN, Zdeněk Jiří. Reflection on the circumstances precluding illegality in criminal interference with copyright using P2P and in particular client-server networks, with an emphasis on legitimate self-defence and extreme necessity. Trestněprávní revue, 2019, no. 2, pp. 27-35

Source: epravo.cz