LONDON — European children’s channel Fox Kids Europe swung from a $700,000 loss to a pretax profit of $3.3 million for the first six months ended March 31, thanks to a strong performance by its channel and Net operations, which more than doubled operating income to $8.3 million.
Total revenues rose 8% to $74.8 million. Rev from channel and Web ops increased 23% to $53.8 million; ad revenue jumped 21% to $15.9 million, while subscription income rose 23% to $36.7 million. Subscribers grew by 1.9 million year on year to 32.8 million households in 57 countries.
Consumer product revs grew by 14%, primarily due to classic property “Power Rangers” and an increased contribution from video. Income from program distribution, however, was down 23% to $16.2 million. FKE blamed lack of product in its library and market conditions for the poor performance.
In a bid to reverse the trend, FKE has added 84 new episodes to its library including new series “Gadget and the Gadgetinis,” “RoboRoach” and “Pig City” as well as an extra season of “Power Rangers Wild Force.” An additional 171 episodes are being added including “Tofu Family” and “Quintuplets” as well as a new season of “Power Rangers Ninja Storm,” “RoboRoach” and “What’s With Andy.”
Despite more shows in the distribution pipeline, FKE predicts full-year revenue from program distribution will be 30%-35% lower than last year due to a cut in the amount of programming available from ABC Family Worldwide and adverse market conditions.
FKE is close to finalizing an output deal with an unnamed German terrestrial broadcaster covering library product and co-productions. It is also extending output deals in other key markets.
Company is focusing on cutting program costs and as a result will move “Power Rangers” filming from California to New Zealand. That’s expected to reduce per-episode cost by 25%.
Costs increased by 10% to $42.1 million largely due to the drop in the dollar against the pound and the euro, as well as additional hires in programming and ad sales. Program amortization fell to $25.3 million from $29.5 million due to lower program distrib revenues.
Cash flow fell by $16.4 million to $44.8 million during the period due to the acquisition of Middle Eastern Communication Holdings’ 49.5% stake in Fox Kids Israel, as well as Israeli rights to the Saban library and certain other local rights, for cash consideration of $20.5 million in December.