New broadcaster Cuatro outperforms expectations

BERLIN — Sogecable announced results more positive than expected Tuesday as 2006 losses were contained to just E38.2 million ($50 million) despite the Spanish TV giant’s launch of broadcaster Cuatro in November 2005.

Full-year sales came in at $2.17 billion.

Boosted by standout ratings for “House,” which averaged a fourth-quarter 18% share, Cuatro outperformed expectations. Share reached 7.2% in December; net ad revenues came in at $227.7 million.

“Gross ad revenues are larger than TV rights and amortization costs, which is a large achievement in a first year of operations,” said Fabian Lares of Espirito Santo Investment.

Bottom-line breakeven looks likely in 2009, he added.

Analysts had feared Sogecable pay TV operator Digital Plus would take a large hit from the increased cost of Spanish soccer league matches after renegotiating rights for Real Madrid and Barcelona. So far, at least, that hasn’t happened.

Overall, content costs rose just 6.5% year on year. Meanwhile, average receipts per subscriber at Digital Plus rose to $51, and Digital Plus added a net 84,000 subs for the year, bringing its total client base to 2.04 million at year’s end.

That’s still below guidance — Sogecable has predicted 2.5 million subs by the end of 2008 — but above analyst predictions.

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