Premiere’s fortunes took a turn for the worse in the first quarter of the year. The German paybox net’s losses increased from E3.4 million ($4.4 million) in the period last year to $23.5 million in 2006, although revenue grew 11% to $351 million.
Company topper Georg Kofler said first-quarter results were “in line with our expectations,” although some local analysts said the losses were three to four times higher than their initial forecasts.
Premiere execs attributed the higher losses on increasing costs for sports programming, but Kofler added, “2006 will be a year of transition and innovation, and we will see returns on our investments as early as 2007.”
Nearly 45,000 customers canceled their subscriptions after Premiere’s loss of upcoming top league Bundesliga soccer to rival pay TV upstart Arena, with the rate of cancellation up more than a point to 15.1%. Current subscribers number 3,521,756.
“Despite the uncertainty surrounding the award of the soccer Bundesliga rights, Premiere has managed to stabilize its customer base,” Kofler added. Premiere is in negotiations with Deutsche Telekom, which controls live Bundesliga Internet rights, about possibly partnering on an Internet rights deal. Sources close to the company said a partnership with Deutsche Telekom’s Internet division T-Online to carry an IPTV feed was increasingly likely, although not all Premiere customers would be technically equipped to receive the signal.
Kofler remained optimistic about Premiere’s prospects to swing a sub-licensing deal for the Bundesliga.
“We are now very confident that we will be able to continue showing the Bundesliga live from August onwards,” Kofler said Thursday. Company indicated further details would be announced in coming days.