Ad-funded groups fare worst in downturn
European TV companies weathered the economic crisis better in 2009 than in 2008, thanks to solid performances from pay TV operators, who propped up overall results for the commercial broadcast sector.European Audiovisual Observatory figures 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 TV groups — which operate 534 channels — fell 1.9% in 2009, compared with a 3% drop in 2008. Net aggregate profits last year for the group were E1.5 billion ($2 billion), compared with net losses of $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. The U.K.’s BSkyB had the best year, posting revenue growth of nearly 20%, up from $6.9 billion in 2008 to $8.3 billion in 2009, while revenues at France’s Canal Plus group stagnated at $6 billion, and Germany’s Sky Deutschland declined by 4% to $1.2 billion. Advertisement-dependant groups had worse financial returns: Ron Lauder’s CME, which runs 21 channels in Central and Eastern Europe, recorded a drop in revenue of 31%, Spain’s Prisa, 18% and Germany’s ProSiebenSat1, 9.6%. Net operating results show a slightly different picture, reflecting damage-control moves by the TV companies. Canal Plus recorded a 14.8% rise in operating profits to $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 TV groups that had diversified holdings that generated revenue from sources other than advertising, fared best. “This enabled BSkyB to increase its revenue, whereas those groups dependent on advertising generally recorded declines. This explains why groups such as Mediaset and ProSiebenSat1 Media are trying to strengthen their position in the pay TV market.”
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