Rakuten TV closes in FAST on CEE

Poland currently has the greatest potential in CEE for AVoD and FAST services says Anna Michalowska, head of content and marketing country manager at Rakuten TV, but obstacles remain.

Rakuten TV holds the distinction of being the first on-demand platform in Europe that combines transactional video-on-demand (TVoD), AVoD and FAST services.

Owned by the Japanese group Rakuten, it is present in 43 markets and reaches over 150 million households across the continent, offering viewers more than 10,000 AVoD titles and a FAST line-up of over 500 unique channels, 100 of which are owned and operated by the company. They span a wide range of genres including news, sports, kids, series, entertainment, music and plenty of movies.

According to Anna Michalowska, head of content and marketing country manager, Rakuten TV, Central and Eastern Europe (CEE) is becoming an increasingly important region for the company. Significantly, it defines the region as four markets – Poland, Romania, Hungary and the Czech Republic – with Poland, certainly in terms of population and availability of services (TVoD, AVoD and FAST), being the largest.

However, says Michalowska, Rakuten TV also has a presence in the TVoD market in several other CEE territories including Bulgaria, Estonia, Latvia, Lithuania, Slovakia and Slovenia. She adds that in 2023 Rakuten TV localised its offer in Poland and Romania, with the Czech Republic and Hungary having since followed this year. There has, as yet, been no localisation in other markets in the region.

“When it comes to the transactional business, Poland is one of the main markets,” Michalowska says. Indeed, Rakuten TV finds itself in the top three platforms in the country and “that is something we are looking to achieve in other CEE markets when it comes to TVoD.”

Looking at AVoD and FAST, she says that Rakuten TV has been investing more time and resources since last year. In Poland, for instance, it launched its first owned and operated FAST channel in June 2023. Known as Top Movies Polska and the first such movie channel on the market, it is available for streaming on the Rakuten TV app across all devices, offering viewers a wide range of content from both Hollywood and European distributors.

All told, Rakuten TV currently offers 70 FAST channels in Poland, a handful of which are localised. The latter include Grjngo (Westerns) and Bigrjme (all other types of movies), both of which are operated by the Berlin-based worldwide streaming network company Amogo Networx.

What works well for Rakuten TV in Poland, says Michalowska, are movie-oriented services such as the localised Top Movies Polska, “because we take the best of the content acquired for AVoD from different content partners and put it into one channel.” This, she adds, “we are planning to do much more in the future.”

Also popular is news content. The EBU-backed news channel Euronews, for instance, is offered in English and free of charge on Rakuten TV’s FAST service. Normally, viewers would have to pay for the channel as part of a subscription package.

Michalowska also points out that at the end of last year and beginning of 2024 Rakuten TV added an AVoD catalogue with around 300 titles to its offer in Poland. Localised films now found in the catalogue include Blood Brother, Vendetta, Letters to Juliet and Single Moms Club.

Elsewhere in CEE, Rakuten TV is currently offering a fully localised TVoD store and AVoD and English-language FAST channels in Romania, Hungary and the Czech Republic, while in other CEE markets it has a TVoD store. While unable to disclose any details at this stage, Michalowska says the company’s goal is to increase its presence across the region.

Looking at the FAST market in general in CEE, Michalowska observes that a year ago the talk was about FAST coming to CEE. Now there is an acceptance that it has arrived and the feeling is: “We have to do something about it.”

“What I’m seeing in the market is there’s a lot of partners wanting to do FAST but they do not yet have the expertise, know scheduling, how to build a FAST channel, how to run a FAST platform.” This, in her view, puts Rakuten TV in a strong position as it has the expertise and an established platform. Indeed, this is its USP, she claims.

Expanding on the challenges faced by other companies, Michalowska says that a lot revolves around Cost Per Mille (CPM), or the amount of money a client spends on advertising for every thousand potential customers reached. The most effective CPM is in Connected TVs, which is also where the majority of Rakuten TV’s traffic comes from.

“When I look at our competitors that is not always the case. There are some apps or platforms that grew from mobile or that had the majority of their traffic from the web. In my opinion it would be quite challenging for them to change their user behaviour from the small screen or web screen to Connected TV.” While monetisation is a challenge for all players in the FAST market, which is growing rapidly in Poland, “[the challenge] is bigger if the size of the screen is smaller.”

Michalowska also believes there are several other obstacles to the development of FAST in the CEE region. The first is the still relatively strong position of pay TV, though this should not be overstated, given that FAST has already “survived” competition from streaming and subscription services. Instead, “we are fighting very low TV advertising prices, which also have a direct impact on the CPM.”

The second is the cost of localisation, with international content distributors and studios preferring to invest in widely used languages such as English or German rather than Hungarian or Czech, which are spoken in small markets. Even Poland, with a population of 40 million, is considered relatively small when it comes to investing in the localisation of content.

The third obstacle is lack of competition. Michalowska believes competition is “very important in order to fuel growth,” adding that it “would be great to see another player launching with their FAST services in Poland in order to move the market forward.”

In 2024, she continues, Rakuten TV’s focus is very much on its FAST and AVoD offering in Poland. Earlier this year it signed an advertising sales agreement with the public broadcaster Telewizja Polska (TVP) and it also envisages cooperation in the content field at a later stage.

Commenting on the future, Michalowska says Rakuten TV will be looking for more third-party channels to join its platform, as well as possibly launching more of its own channels.

She also detects an interesting change in how Hollywood majors see the CEE region. While in 2023 they hardly regarded it as interesting, this year some are taking note of the double-digit growth it is seeing in the transactional business. This is in contrast with stagnation in Western Europe and “so in terms of TVoD the next two years will belong to CEE.”

At the same time, Poland is much more likely to succeed in AVoD and FAST than Rakuten TV’s three other main regional markets because of its population size and advantage in CPM.