MTG’s latest results provide further proof – if it were needed – of the difficulties still faced by the wider TV industry in Central and Eastern Europe as the region comes out of recession.
Take the free TV sector, where the company has a presence in the three Baltic Republics, Czech Republic, Bulgaria, Hungary, Slovenia and of course Russia, which reports separately. In most cases the picture is mixed: in the Baltics, for instance, sales were down year-on-year in Q2 and also down year to date. On the other hand, Viasat increased its advertising market share during both periods.
Meanwhile in the Czech Republic, where MTG’s Prima TV and Prima Cool compete intensely with CME-owned operations headed by TV Nova, the company also gained ad share. The same was true for its operations in Bulgaria, and overall it could be said that despite a general reduction in net sales, there was constant exchange rates sales growth and improving profitability.
Although there was also growth in the regional Viasat pay-TV operations, with net sales in Q2 and H1, for instance, being up by 3% and 1% respectively year-on-year, performance certainly varied from market to market. The Baltic Republics were particularly hard hit by the global economic crisis and this reflected on the company’s interests there last year.
Unfortunately, it is still losing subscribers in the three countries, though this is being offset by gains in Ukraine.
Ukraine is nevertheless developing into a highly competitive DTH market, with services also provided by Poverkhnost Plus, MYtv and Russia’s NTV-Plus. This will undoubtedly have some impact on Viasat’s future growth in the country.
MTG’s DTH platform Raduga TV faces a similar challenge in neighbouring Russia, where the market is dominated by Tricolor TV and NTV-Plus, both of which are backed by Gazprom Media.
The fortunes of MTG’s free TV operations in the CEE region will ultimately be determined by how quickly ad markets recover from the recession. Although the situation is improving, there is still a long way to go.
Its pay-TV operations will also begin growing more vigorously in terms of subscriber numbers as the region’s economies finally start to pick up.
