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Cyfrowy Polsat-Discovery OTT venture referred to Polish regulator

The creation of a joint OTT streaming venture by Polish pay-television broadcaster Cyfrowy Polsat and media group Discovery has been referred to the Polish competition authority by the European Commission.

The European Commission said that it has made the referral under Article 9 of the EU Merger Regulation. The referral comes following an application from the Polish government, which asked the European Commission to assess the impact the new venture could have on the media sector in the country.

The European Commission has decided that Poland’s Office of Competition and Consumer Protection (UOKiK) should evaluate the venture, details of which were first made public last October. Discovery and Cyfrowy Polsat applied to the European Commission for consent to establish the joint venture in July.

The tie-up between Cyfrowy Polsat and Discovery centres on an OTT streaming platform featuring sports, entertainment, movies and documentaries. It would be initially focused on Poland but Cyfrowy Polsat said the intention is to expand to other countries.

The platform is set to be run as a financially and operationally special purpose vehicle (SPV) on a 50-50 basis and will include content from Polsat and TVN, the Discovery-owned free-to-air broadcaster. Original programming will also be commissioned by Polsat and Discovery.

The initial investment from Cyfrowy Polsat and Discovery was capped at PLN30m (€6.8m/$8.1m) each. Cyfrowy Polsat will hold 50 per cent of the shares in the SPV and provide financing on a 50-50 basis in the shape of share capital increase and shareholder loans.

Discovery is due to take up its shares after the relevant anti-competition approval is received. It is unclear when UOKiK will come to a decision on the joint venture.

The OTT platform is expected to operate initially as an AVOD (advertising-based video-on-demand) service before subscription and pay-per-view offerings are introduced at a later stage.

Despite the launch of the new platform, Cyfrowy Polsat will continue to operate its Ipla.tv platform and the TVN Discovery-owned Player.pl will still be available to viewers for the time being.