NEM 2023: inside the evolving CEE market

Central and Eastern Europe’s evolving market was the highlight of the 10^th anniversary for 2023 New Europe Market (NEM) that took place in Dubrovnik Croatia. The event which first launched in 2013, against the backdrop of the coast, delivered panel discussions from key industry leaders from Viaplay, SkyShowtime, United Group, and more.

This year the main focus at NEM was on growth whether that was growing revenue, growing audiences, or growing relationships. While all efforts are being made to expand the CEE market, it was made clear the region should adapt but evolve to what works best for it.

While global streamers have focused on boosting take-up of their services, pay TV and linear channels continues to reign in the CEE market, unlike the western European market.

At NEM United Group’s chief executive officer, Victoriya Boklag, pointed to the need to invest in more local content to attract audiences; a key advantage which local operators hold over the global streamers.

She said, “Netflix, and similar platforms will never start producing local news or local entertainment” in the same way as local operators.

For the global streamers, there was demand for them to also adapt and forge a strategy that best suits the CEE area, rather than the region adapting to trends and competing in a market that does not best reflect it.

SkyShowtime boss, Monty Sarhan noted that linear TV in CEE is “hugely important” and a “really valuable ecosystem” that should not be overlooked.

SkyShowtime is a joint venture of Comcast and Paramount Global targeted to Europe, which launched in 2022, in 22 markets across the continent.

During his keynote the CEO of the streamer explained that different market conditions call for different company strategies.

“It requires a very sort of bespoke different strategy to tackle the opportunities that exist in each of these markets. These countries are in very different places in terms of their voyage and the streaming future.”

In the circumstances of a market like the CEE region, Sarhan emphasised the value of creating partnerships with local providers.

“Satellite and MVPD players are very important partners to us. So we look to partner with them, because that’s where people in those regions are still consuming television and they’re still in that ecosystem” he said.

Yet Dimitris Michalakis, executive director of Cosmote TV did not share the same view, arguing that “linear television is no longer relevant” with the market changing. He shared the viewpoint that audiences want to watch sports, movies, sales, and documentaries that can now be found on on-demand services, but nevertheless emphasised partnerships as a necessary ingredient.

“This is something that we have to work out with our partners, how we can still have meaningful form of linear channels on our platform, in order to try and see how we can both get more out of on-demand content,” said Michalakis.

FAST

A presentation by Omdia’s senior director, Maria Rua Aguete, further added to the point of pay TV still dominating the CEE region, with the FAST market growing steadily.

Currently, Rakuten and Plex are the only FAST platforms, in addition to a small pool of local FAST operators such as Poland’s Kabaret TV. Omdia highlighted that due to CEE’s current smaller market size, the international FAST channel operators have not launched their channels in the region.

The research outfit predicted FAST revenues in the CEE market will double from $23.5m in 2022 to $41.9m in the next six years.

Rua Aguete explains: “Though CEE is present in the FAST race, growth will be limited compared to other regions. Traditional linear TV and social video have typically driven video advertising revenues in CEE, which have generated $5.6bn and $1.1bn respectively. Pay TV is still growing in this market alongside a strong traditional free-to-air viewing model. This region’s online advertising market is a lot less developed compared to their Western Europe counterparts and there is currently no ecosystem or marketplace that can provide premium ad-supported advertising video on demand (AVOD) and FAST services. A combination of these factors has resulted in reduced consumer interest in FAST.”

Presence

With strong attendance for presentations and sessions from Lionsgate, Warner Bros. Discovery and Disney, it is reasonable, going forward, to expect a greater presence from the global streamers including Netflix and, possibly, Amazon Prime Video at NEM.

Commenting on NEM’s progression over the 10 years the show has been running, Rua Aguete, says: “From a small gathering of content owners from CEE, the event has grown and evolved to a bigger event where content owners, distributors and tech vendors meet to share their views about the industry. Although the main focus is still Central and Eastern Europe you can see more and more global players from all over the world coming to Dubrovnik for this event.”

Overall, NEM demonstrated that, despite CEE being a smaller market, it is one that is seen as valuable, with many players trying to expand in the region.