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Low Visibility For The TV BusinessThe pain has moved to the television business. Between second screens and diminished ad revenues, big TV companies are cutting costs further, shedding assets and generally restructuring. Publishers went through this exercise and several emerged with only light haircuts. When ad and subscription revenues held on broadcasters thought they would avoid the barber: maybe not.Reporting Q3 results (November 13) French broadcaster TF1 Group showed turnover down 1.7% to €551.7 million on ad revenues down 10.2% to €266.3 million. Telecom, insurance and food sectors have reduced ad spending, said CEO Nonce Paolini in the analysts conference call, “in addition to pressure on prices.” Meanwhile, “diversified activities have fully played their counter-cyclical role,” meaning digital and pay-TV products saw advertising and subscription revenues up 7.9% quarter to quarter to €285.4 million. Cost control efforts will continue, said CFO Philippe Denery on the same conference call. “We are the only channel to commit ourselves to evolution and control of our costs,” he said, without contributing an outlook for Q4 or 2013. “We have low visibility.” At the same time TF1 Group announced it is in “exclusive” talks to form a “strategic partnership” with Discovery Communications, said the official statement (November 13). Details were sketchy but the deal involves the Eurosport sports channel bouquet owned by TF1, Discovery Communications investing a tidy sum. Discovery Communications, owner and operator of more than 150 cable channels worldwide, also signed a UK distribution deal with telecom BT (November 16). Q3 was also unkind to Mediaset, Italy’s biggest broadcaster with significant assets in Spain, which reported its first net loss in 17 years. “On the advertising revenues side, prospects remain uncertain in the short and medium term and early indicators for the fourth quarter, both in Italy and in Spain, are that there will be no reversal in this trend,” said the company statement (November 13). Cost-cutting will continue and “nothing is in the negotiation stage,” said CFO Marco Giordani, for new deals or partners. Quarterly results for ProSiebenSat.1 Media were upbeat, revenue up 7.1% to €636.9 million. German broadcast revenues, however, were down 3.2%. Aggregate German and Austrian ad market shares dropped to 26.8% from 29.4% year on year. Revenues from digital and video on demand (VOD) products soared by 50%. “We are developing ProSiebenSat.1 from a traditional TV provider to a digital entertainment powerhouse,” said CEO Thomas Ebeling in a statement (November 6), “and are thus setting the course for a long-term, successful development of the group.” The company shed Belgian and Dutch assets last year and is pondering bids for Scandinavian radio and TV stations, including one reportedly from Discovery Communications. Ad revenues for the SBS radio and television unit were up 8.8% and Mr. Ebeling reiterated that it will be sold off only for a “very, very good price.” Analysts have been floating a price tag in the vicinity of €1.3 billion. Purring along, too, is RTL Group, principally owned by Bertlesmann, which reported Q3 revenue (November 13) up 5.5% to €1.296 billion from €1.229 billion one year on. Production house FremantleMedia, the company sold a building in London, and ad sales in Germany added to the positive results. Ovrerall revenues were offset by “challenging market conditions in other countries, higher investment in programming and portfolio effects such as the disposal of the Dutch radio stations,” said the official statement. Rumors have been rife that disposal of certain central and eastern European assets are imminent. The company reports details only at the half year. The canary in the mineshaft for central and eastern European television, Central European Media Enterprises (CME), reported a lackluster Q3 (October 31) with core profit dropping 60.6% and offering less optimism for the rest of the year. “Our third-quarter results and the prospects for the full year indicate that our markets are not recovering,” said CEO Adrian Sarbu on the analysts conference call. “We were unable to achieve our sales and free cash flow targets.” Mr. Sarbu suggested the disposition of certain assets are being evaluated, spurring rumors about exits from Croatia and Slovenia. See also in ftm KnowledgeMedia in GermanyHome to Europe's biggest broadcasters and publishers, Germany is a highly competitive media market. Transition to digital television was easy, other media not so simple, unsuprising with Germany's complex regulation and business structures. This Knowledge file reports on media leaders and followers. Includes Resources 214 pages PDF (July 2013) Media in ItalyThe Italian media market is totally unique and very competitive. Italian consumers are quickly embracing new media and the advertising community is quickly changing. And hovering close is Italy's richest person - Silvio Berlusconi. 112 pages, includes Resources, PDF (October 2012) Media in FranceFrench audiences are moving fast to every new platform. Mobile and Web media challenges the old guard while rule makers seek new directions. Media life in France... and a few secrets. includes updated Resources 147 pages PDF (November 2011) Bertelsmann/RTL - Europe's BiggestFew media groups have the scale and dynamics of Bertelsmann. From austere beginnings as a hymnal publisher, it has become the dominant European publisher and broadcaster through subsidiaries RTL and Gruner + Jahr. And it's arms reach around the world. ftm explores Bertelsmann and RTL. 30 pages. PDF (April 2010) |
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