Dušan Švalek, CME Deputy CEO: CME will continue to invest heavily in content
Dušan Švalek was recently promoted to Deputy CEO at CME responsible for the operations in Bulgaria, Croatia, Slovakia and Slovenia. In his first interview for CEETV, the top executive talks to Yako Molhov about the recent market developments and trends on the respective markets, as well as CME's strategy to invest in high-quality local content which attracts viewers both on traditional commercial TV and drives the growth of premium streaming service Voyo.
Dušan Švalek, CME Deputy CEO
Dušan, you were promoted to Deputy CEO, responsible for Bulgaria, Croatia, Slovakia and Slovenia in January this year. What is the main strategy behind the division of CME's territories into two groups, the other one being Romania and the Czech Republic?
CME has one collective goal and strategy: to continue to be the CEE region’s top content producer offering high-quality and high-volume local content for distribution across our linear and digital channels. Convenience is one of the most important drivers in our industry today, and our aim is to meet our consumer and client demands. Each country’s strategy is slightly different based on local traditions/differing cultures and socio/economic factors, so it would be incorrect to categorize the Czech Republic and Romania as one territory and the remainder as the second group, as each market is truly individual in nature.
CME is owned by PPF Group which operates companies in the telecom sector in other CEE territories as well, i.e. Hungary and Serbia. Is CME considering expanding its footprint to new territories in the future?
We will always review an interesting opportunity should it present itself.
You are also responsible for building the corporate business-to-customer and transformation strategies. Can you give us details on what are the main transformations CME has planned?
The growth of our B2C segment is characterized by 3 words: increased video consumption. CME’s production of high-quality content is exponentially greater than just a few years ago and this increase, combined with the convenience with which such content is consumed, explains why video consumption has really taken off in our markets. B2C success in our industry will only come by really catering and focusing on the content needs of our target audience. My job in terms of the B2C segment is to make sure CME is the best invested and best prepared organization to meet the needs and demands of our increasingly demanding and segmented customer.
CME is owned by PPF Group which also operates PPF Telecom Group. What are the main synergies between the company's telecom and media businesses?
Telco operators are in general far more advanced when it comes to the finer details of the B2C experience, such as billing, customer service, and excelling in the customer journey. These are extremely important learnings for us. Telco operators also have a natural client base that we share and given the fact they have a clear distribution offering, our interests align.
How would you describe the current state of the TV ad market in Bulgaria, Croatia, Slovakia and Slovenia? And what are your forecasts for this year and beyond?
Our group advertising YTD revenues are up versus last year. However, we are seeing diverse trends in our markets. In markets such as Slovenia, there has been persistent caution on the side of advertisers since the end of 2022 and that is despite the relatively standard macroeconomic situation. TV advertising demand in Slovakia has shown encouraging market capacity trends and the overall advertiser sentiment in both Bulgaria and Croatia is optimistic, and we are expecting a positive outcome for 2023. The overriding positive indicator that we are seeing in 2023 is that the annual client contracting in each of our CME markets is above last year's. That leads us to believe the diverse phasing trends we have seen so far will be re-balanced on the full-year basis.
What are the latest programming and content trends in Bulgaria, Croatia, Slovakia and Slovenia? Is CME planning to increase its investment in content?
The years during the Covid pandemic were characterized by the prevalence of comforting and soothing content. However, we are now witnessing a shift in audience preferences towards more intelligent and escapist formats. Unscripted content will assume a progressively significant role in our programming strategies across all platforms. Scripted content, specifically tailored for streaming services, will drive an amplified demand for astonishing and stranger-than-fiction stories inspired by real events. Such narratives will serve as powerful catalysts for marketing our platforms and products, setting us apart from our competitors.
Since the acquisition by PPF in October 2020, CME has invested heavily into new, local scripted and unscripted content and this will continue to grow in the future. Over the last 2.5 years, CME boosted its investments into content by 82%, which consists of increased investment into scripted productions by 72% and by 110% into unscripted investments.
Broadcasters in CEE have been supporting their Ukrainian colleagues thru different initiatives in the past year. What is CME's strategy in this respect, are you exploring also potential co-productions and acquiring Ukrainian content, especially bearing in mind the number of refugees in many CEE territories?
Our immediate response to the war was excellent. We increased news across all our stations. Where we could, we integrated native Ukrainian news and children’s content into our broadcasting, and our companies all rose to the occasion and made huge efforts to meet the demanding humanitarian needs by collectively helping to raise over €3.3 million for third party NGOs.
We also hired skilled Ukrainians whenever possible (editors, showrunners, makeup artists, etc).
CME will be attending NATPE Budapest this year. What will be the company looking for in terms of acquisitions and what type of content will it be offering to market delegates?
We regard NATPE as a high-quality event and view it as an excellent opportunity to maintain a conversation with the industry's most influential stakeholders. Aligned with our strategy of providing premium content, CME will be exploring the newest international scripted hits that we could add to our SVOD offering. Additionally, we will continue to showcase our content and products to our regional partners, recognizing that our content is specifically designed for the CEE region, making it highly adaptable and appealing.
What is your niche channels strategy for this year? Do you see room for growth and have you planned the launch of new channels? What about the currently very popular FAST channels?
We are primarily focusing on the growth of our SVOD service as its momentum maximizes our current growth potential. We are evaluating the optimal timing and extent of further diversification of our streaming services portfolio.
Can you reveal some numbers about your streaming services in the four CEE countries? Are you happy with the number of subscribers in the different territories and what are your targets for this year?
Voyo is offered in the Czech Republic, Slovakia, Romania, Bulgaria and Slovenia. We are very pleased with the growth to date and have high ambitions for the future. The Czech Republic and Slovakia have recently surpassed the 550.000 subscriptions mark. This is an incredible achievement, especially given the number of subscriptions in October 2020 (when PPF acquired CME) was around 60.000. We are confident we will reach 1 million subs in the Czech Republic and Slovakia by 2026 as originally stated. Our pan-CME achievements are also impressive: We are close to surpassing 1 million subs with excellent results in Slovenia and solid growth in Romania, making it a leading streamer on the local market. CME figures are without RTL Play.
CME has one collective goal and strategy: to continue to be the CEE region’s top content producer offering high-quality and high-volume local content for distribution across our linear and digital channels. Convenience is one of the most important drivers in our industry today, and our aim is to meet our consumer and client demands. Each country’s strategy is slightly different based on local traditions/differing cultures and socio/economic factors, so it would be incorrect to categorize the Czech Republic and Romania as one territory and the remainder as the second group, as each market is truly individual in nature.
CME is owned by PPF Group which operates companies in the telecom sector in other CEE territories as well, i.e. Hungary and Serbia. Is CME considering expanding its footprint to new territories in the future?
We will always review an interesting opportunity should it present itself.
You are also responsible for building the corporate business-to-customer and transformation strategies. Can you give us details on what are the main transformations CME has planned?
The growth of our B2C segment is characterized by 3 words: increased video consumption. CME’s production of high-quality content is exponentially greater than just a few years ago and this increase, combined with the convenience with which such content is consumed, explains why video consumption has really taken off in our markets. B2C success in our industry will only come by really catering and focusing on the content needs of our target audience. My job in terms of the B2C segment is to make sure CME is the best invested and best prepared organization to meet the needs and demands of our increasingly demanding and segmented customer.
CME is owned by PPF Group which also operates PPF Telecom Group. What are the main synergies between the company's telecom and media businesses?
Telco operators are in general far more advanced when it comes to the finer details of the B2C experience, such as billing, customer service, and excelling in the customer journey. These are extremely important learnings for us. Telco operators also have a natural client base that we share and given the fact they have a clear distribution offering, our interests align.
How would you describe the current state of the TV ad market in Bulgaria, Croatia, Slovakia and Slovenia? And what are your forecasts for this year and beyond?
Our group advertising YTD revenues are up versus last year. However, we are seeing diverse trends in our markets. In markets such as Slovenia, there has been persistent caution on the side of advertisers since the end of 2022 and that is despite the relatively standard macroeconomic situation. TV advertising demand in Slovakia has shown encouraging market capacity trends and the overall advertiser sentiment in both Bulgaria and Croatia is optimistic, and we are expecting a positive outcome for 2023. The overriding positive indicator that we are seeing in 2023 is that the annual client contracting in each of our CME markets is above last year's. That leads us to believe the diverse phasing trends we have seen so far will be re-balanced on the full-year basis.
What are the latest programming and content trends in Bulgaria, Croatia, Slovakia and Slovenia? Is CME planning to increase its investment in content?
The years during the Covid pandemic were characterized by the prevalence of comforting and soothing content. However, we are now witnessing a shift in audience preferences towards more intelligent and escapist formats. Unscripted content will assume a progressively significant role in our programming strategies across all platforms. Scripted content, specifically tailored for streaming services, will drive an amplified demand for astonishing and stranger-than-fiction stories inspired by real events. Such narratives will serve as powerful catalysts for marketing our platforms and products, setting us apart from our competitors.
Since the acquisition by PPF in October 2020, CME has invested heavily into new, local scripted and unscripted content and this will continue to grow in the future. Over the last 2.5 years, CME boosted its investments into content by 82%, which consists of increased investment into scripted productions by 72% and by 110% into unscripted investments.
Broadcasters in CEE have been supporting their Ukrainian colleagues thru different initiatives in the past year. What is CME's strategy in this respect, are you exploring also potential co-productions and acquiring Ukrainian content, especially bearing in mind the number of refugees in many CEE territories?
Our immediate response to the war was excellent. We increased news across all our stations. Where we could, we integrated native Ukrainian news and children’s content into our broadcasting, and our companies all rose to the occasion and made huge efforts to meet the demanding humanitarian needs by collectively helping to raise over €3.3 million for third party NGOs.
We also hired skilled Ukrainians whenever possible (editors, showrunners, makeup artists, etc).
CME will be attending NATPE Budapest this year. What will be the company looking for in terms of acquisitions and what type of content will it be offering to market delegates?
We regard NATPE as a high-quality event and view it as an excellent opportunity to maintain a conversation with the industry's most influential stakeholders. Aligned with our strategy of providing premium content, CME will be exploring the newest international scripted hits that we could add to our SVOD offering. Additionally, we will continue to showcase our content and products to our regional partners, recognizing that our content is specifically designed for the CEE region, making it highly adaptable and appealing.
What is your niche channels strategy for this year? Do you see room for growth and have you planned the launch of new channels? What about the currently very popular FAST channels?
We are primarily focusing on the growth of our SVOD service as its momentum maximizes our current growth potential. We are evaluating the optimal timing and extent of further diversification of our streaming services portfolio.
Can you reveal some numbers about your streaming services in the four CEE countries? Are you happy with the number of subscribers in the different territories and what are your targets for this year?
Voyo is offered in the Czech Republic, Slovakia, Romania, Bulgaria and Slovenia. We are very pleased with the growth to date and have high ambitions for the future. The Czech Republic and Slovakia have recently surpassed the 550.000 subscriptions mark. This is an incredible achievement, especially given the number of subscriptions in October 2020 (when PPF acquired CME) was around 60.000. We are confident we will reach 1 million subs in the Czech Republic and Slovakia by 2026 as originally stated. Our pan-CME achievements are also impressive: We are close to surpassing 1 million subs with excellent results in Slovenia and solid growth in Romania, making it a leading streamer on the local market. CME figures are without RTL Play.
