Tough market squeezes revenue
BERLIN — Underscoring continuing difficulties in Germany’s tough pay TV market, feevee platform Premiere on Tuesday posted a Euros 28 million ($41 million) loss in the first three quarters of the year, while revenue dropped 13.7% to $1 billion.
However, Premiere managed to considerably narrow its deficit from the $220.5 million loss it took in the same period last year and boosted the number of subscribers by 24% to 4.1 million.
Premiere has attracted 105,000 customers with its new satellite service Premiere Star since its launch in September. The feevee platform aims to attract 200,000 customers a year with the service, which bundles and markets 14 pay TV channels, including NBC Universal’s Sci Fi, Sony’s AXN, Turner Classic Movies and Toon Disney.
The broadcaster was above the line with a third-quarter profit of $145,000 compared with a $47.4 million loss in the second quarter of 2007, but down dramatically from the $7.8 million earnings achieved in the same period last year.
Fortifying its flow of scripted content, Premiere extended its output deal with Paramount, insuring long-term contracts with all of the Hollywood majors. The output deal guarantees exclusive broadcasting rights (including satellite, cable, IPTV and mobile) to all of the studio’s blockbusters and top TV productions.
While Premiere reduced programming costs by $15.8 million to $194 million, marketing and sales costs increased, primarily due to top league Bundesliga soccer.
Bidding for the Bundesliga rights is scheduled to start in April and Premiere is hoping to acquire greater exclusivity.
“The bidding process will begin much later than expected and an agency has been commissioned to manage the process,” said Premiere CEO Michael Boernicke, alluding to the deal struck recently by media mogul Leo Kirch and the German Football League (DFL) to market Bundesliga rights.
“We cannot rule out that this new development could impact potential and existing subscriber behavior,” Boernicke added. “We want to keep an eye on this development before updating our forecast for 2008.”
Premiere plans to include that update in its annual report to be published in February.
The feevee’s current sports lineup includes exclusive rights to all Formula One races for Germany, Austria and Switzerland through 2010.
Starting next season, Premiere will offer Formula One on a pay-per-view basis as a live stream via the Internet.
The broadcaster also has exclusive rights to German Ice Hockey League games through 2012.