Ukraine Needs Single Currency for Channels and operators

Despite the problems with regulation, piracy and low ARPU, channel managements are also concerned with underreporting and its consequence – a lack of a single “currency”. As a result, the channels cannot clearly define the price at which to sell content to operators, and those, in turn, “play” with the numbers, deceiving the channels and the state.

If, according to Anna Pak, director of distribution of the Discovery Networks channels in Ukraine, Moldova, the Baltic States and Belarus, her team simply doesn’t sell the rights to broadcast their channel at a low price, as not to bring down any local or neighbouring markets, then Ukraine will not have such a big choice of channels. The difficult economic environment, ban of Russian channels and lack of regulation force Ukrainian channels to produce their own content and try to sell as many distribution platforms as possible. Therefore, in most cases, the content is sold at a lower cost by the cable company, therefore having lower profit, as the number of subscribers is being deliberately understated.

The ideal option – as was the case with telemetry, when Ukraine replaced GfK with Nielsen, and a state regulator, which was susceptible to bias, was left out of the process – would be for the industry players to create a single “currency” in the form of a tariff per subscriber. This way, the cable companies will be forced to be honest.

Naturally, the channels could continue to negotiate the cost of broadcasting, but they could focus on the actual coverage of audience, and balance the costs and revenues. The regulator would be able to regulate this process and monitor the flow of funds to the budget from the subscriber tax. Unfortunately, at the moment this is just an idea that has not yet been put into action.

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