Ads drive pay TV growth

Revenues at Spanish niche channels rose 215%

Pay TV faces a tough battle luring subscribers in Spain so its main niche channels — Fox, AXN, Calle 13 and TCM — are looking to advertising to drive growth and profit margins.

Ad revenues at Spanish niche channels rose 215% from first half 2003 to first half 2006 reaching e20.3 million ($31 million), according to a new study, aimed as a wake-up call to advertisers.

In contrast, between 2003 and June 2006, subs at satcaster Digital Plus, which carries most top niche channels in Spain, increased 7% to 2 million, while cable TV clients rose 26.6% to just over 1 million.

Specialty channel advertising looks to have a large growth potential: Niche services repped 8.2% of total TV audiences in the first half of 2006, yet took just 0.5% of total TV ads in 2005.

Report also studies the lifestyle of subscribers — 87% have mobile phones, 53% have Internet access and 80% own cars.

The top theme channels in Spain by niche channel market share are Canal Plus (9.1%), AXN (7%), Fox (6.6%), Calle 13 (5.45%) and Canal Hollywood (5.1%).

“Subscriber fees are still our main revenue source, but given the ratio between our audience share and TV advertising and the continuing fragmentation of the Spanish TV market, I’m optimistic that niche channel advertising has a promising future in Spain,” said Domingo Corral, director of TCM.

The study was compiled by communications research company AIMC, Spain’s Thematic Channel Group and advertising research company ARCE Media, and sponsored by media agency ZenithMedia.

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