Just how recession proof is the TV industry in Central and Eastern Europe? Given what happened in the first quarter of an extremely difficult year, perhaps more than many people realise.
No one can deny that the region, as indeed in the rest of the world, is in a parlous economic state. Just this week, for instance, it was reported that GDP in Estonia, one of the worst hit countries, could contract by as much as 12% in 2009.
The first concrete signs of how the TV industry is coping will only start to emerge in the next few weeks, and certainly from May onwards, when a host of companies report their Q1 results. All eyes will be on the big players, in particular Liberty Global, CME, MTG and RTL, as well as key local groups such as Poland’s ITI and Polsat.
What we have to go on right now are 2008 results, which for many companies were good for the year as a whole but “iffy” for the fourth quarter, and what has been reported in the first three months of this year.
Of particular concern to the TV industry must be the rapidly deteriorating ad market. Data released this week by GroupM shows that the region it terms ‘Emerging Europe’ is likely to see media investment slump by a huge 18.1% in real terms in 2009. This will make it the worst hit part of the world, with Western Europe, second from bottom, contracting by 8.5% and only one region (Latin America, +1.7%) registering growth.
On the other hand, we are seeing spectacular growth in a number of TV sectors in CEE. The take-up of DTH services, for instance, is rising rapidly in such leading markets as Poland (all five platforms) and Russia (principally Tricolor). Digital cable, too, is finally starting to make an impression, thanks in no small part to recent rollouts by UPC.
Also worth noting is the quickening pace of digitalisation in such markets as the Czech Republic and the increasing availability of HD channels on all platforms across the region.
Despite times being hard, these positive trends that are likely to continue in 2009.