The CEE region: the rise of Smart TV and Netflix's dominant position

The rise of Smart TV, Netflix's dominant position, and the significant role of torrents in certain markets. The VideoTrack study by WPP Media reveals a complex picture of the video market in the CEE region. A strong "frienemy" relationship between streamers and pay-TV operators is particularly evident in Romania, where nearly 4 out of 10 SVOD customers purchase subscriptions through television operators. The most loyal streaming customers? Poles and Hungarians. Among Czechs, we find more streaming "hoppers."

"CEE is a region where global trends blend with regional specifics. Paid streaming, although not everyone predicted its success here, effectively competes for customers and currently coexists harmoniously with the pay TV market. News of cord-cutting reaches us from across the ocean but isn't reflected in the behavior of customers in the region. This preserves television consumption as such. The downward trend is milder than in Western markets," commented Izabela Albrychiewicz, WPP Media CEO CEE. "VideoTrack brings more good news for advertisers - the popularity of Smart TV and openness to advertising from global streamers, which we surveyed in the study, prove that at least part of the lost TV potential in CEE markets will be 'recovered' in the form of equally valuable advertising contacts in the streaming world," she added.

Watching movies and series online is a mass entertainment activity in the CEE region. The percentage of internet viewers (e-viewers), defined as people watching movies, series, and other professional content online, ranges from 78% among Romanian internet users to 87% among Polish internet users, according to the VideoTrack study by WPP Media. The majority of e-viewers in the region use streaming platforms: from 72% in the Czech Republic to 90% in Poland. However, declaring the death of torrents across the entire CEE would be premature. Although in Poland, over the decade, we observed a shrinking torrent niche, currently accounting for just 9 percent of e-viewers, in the Czech Republic, every third internet viewer still downloads movies, series, and other long programs from the internet.

The popularity of torrents goes hand in hand with the tendency to invest in paid streaming. It is in the Czech Republic where the lowest percentage of internet viewers pay, in various forms, for video content. The highest number of people who at least sometimes pay for watching movies, series, and other types of long programs can be found among internet viewers in Poland (as much as 70%), which is the largest and strongest market in the region in terms of paid streaming position. Despite Poland having the highest saturation of streaming services, it is here and in Hungary where we find the largest groups of SVOD customers who are long-term subscribers of Netflix, Max, Disney+, etc. In the Czech Republic, on the other hand, the WPP Media study identifies the most streaming "hoppers"

REGIONAL "FRIENEMY" 
The expansion of streaming in the CEE region is impacting traditional television consumption. Over the past 5 years, viewing time has decreased by 12-14% in Poland, the Czech Republic, and Romania, and by 6% in Hungary among all viewers (4+; data from telemetric measurements in individual markets). Much sharper declines are seen in younger groups, such as 15-24-year-olds, where viewing time has halved over the past decade in Poland and Hungary.  While this trend is visible in TV consumption and is undoubtedly partly the "Netflix effect," the expansion of streaming has not undermined the position of the pay TV segment in the region - pay TV penetration in Romania and Hungary still reaches 90%, in Poland, 75%. There is currently no talk of cord-cutting in the region.

Paradoxically, streaming supports this segment. In Poland, the Czech Republic, Romania, and Hungary, there is a strong "frienemy" relationship between streamers and pay TV operators. As VideoTrack shows, in Romania, as many as 37% of internet viewers purchase streaming service subscriptions through pay TV providers. This purchase model is most popular among silver viewers - the generation over 55, for whom pay TV opens the gateway to the world of streaming. Telco operators also play an important role in reselling subscriptions across all markets in the region. Interestingly, however, younger viewers of streaming platforms are more likely to purchase subscriptions through them. The position of pay TV in the region is evidenced by - verified in VideoTrack - viewers' approach when purchasing a new streaming subscription. Most surveyed SVOD customers from Poland, the Czech Republic, Hungary, and Romania claim that when buying access to another streaming service, they would not give up other subscription services. However, those who would cancel something, across all CEE markets, more frequently state that another streaming subscription would be sacrificed rather than their pay TV subscription.

VideoTrack reveals the "televisioning" of streaming in the region, with Poles, Czechs, Hungarians, and Romanians most frequently watching VOD services on TV screens and in company settings. The percentage of active Smart TV users (using streaming applications on televisions) among regional e-viewers ranges from 52 percent in the Czech Republic to 61 percent in Romania. The TV screen is now not only the most popular but also the favorite screen for watching movies and series online across all age groups. Netflix and YouTube top the ranking of the most popular Smart TV applications in all markets in the region. In Poland, as in other rankings prepared based on data from VideoTrack, there is also a greater dominance of global brands among streaming applications.
This results from the greater content investment in the Polish market by international streamers such as Netflix, Max, or Prime Video. That's partly why, unlike other regions, Polish viewers rank global creators above local broadcasters for top series

Netflix rules everywhere, with Max and Disney+ typically forming the second tier. Each market has its own specific characteristics. We will see the most "locality" in the Czech ranking, while in Poland, Prime Video stands out with a strong position (having invested in the Polish market with local productions, mainly in the unscripted category). It should be emphasized that the ranking of favorite brands is not 100 percent identical to the ranking of most frequently subscribed services.