Ad-funded groups fare worst in downturn
LONDON — Private television channels across Europe weathered the economic crisis better in 2009 than in 2008, thanks to upbeat or solid performances from pay TV operators, who propped up overall results for the commercial broadcast sector.Analysis of financial figures by the European Audiovisual Observatory show that those companies with diversified operations that did not solely rely on advertising did best last year. The revenues of the 12 main private European television groups — which operate a total of 534 channels — fell by 1.9% in 2009 compared with a 3% drop in 2008. Net aggregate profits last year for the group was E1.5 billion ($2 billion), compared with net losses of E1.2 billion ($1.6 billion) in 2008. Seven of the companies have activities across channels and distribution platforms and most are involved in program production. It was the results from those seven that were not totally reliant on advertising that kept the overall figures up. Britain’s BSkyB had the best year, posting revenue growth of nearly 20% up from E5.2 billion ($6.9 billion) in 2008 to E6.2 billion ($8.3 billion) in 2009, while revenues at the France’s Canal Plus group stagnated at E4.5 billion ($6 billion) and Germany’s Sky Deutschland declined by 4% from E941 million to E901 million ($1.26 billion to $1.2 billion). Advertisement-dependant groups had worse financial returns: Ron Lauder’s Central European Media Enterprises, which runs 21 channels in Central and Eastern Europe, recorded a drop in revenue of 31%, Spain’s Prisa 18% and Germany’s ProSiebenSat 1 9.6%. Net operating results show a slightly different picture, reflecting damage limitation moves by the television companies. Canal Plus recorded a 14.8% rise in operating profits to E652 million ($874 million) helped by cost cutting, savings from mergers, increased advertising and increased subscriptions at home and abroad, which rose from 12 million to 12.5 million. The analysis by the Strasbourg, France-based European Union body, showed that those television groups that had diversified holdings that generated revenue from sources other than advertising, fared best. “The diversification of activities is certainly one of the most important factors for weathering the crisis,” the Observatory said. “This enabled BSkyB to increase its revenue whereas those groups completely or mostly dependent on advertising have generally recorded significant declines. This explains why groups that have historically had a strong presence in the advertising market, such as Mediaset and ProSiebenSat. 1 Media are trying to strengthen their position in the pay TV market.”
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