2010 is likely to go down as the year the vertically integrated media company CME finally started to turn things round in its operations in Central and Eastern Europe.
Present in the region since 1994, when it launched TV Nova in the Czech Republic, CME has undergone a remarkable transformation in the last two to three years, chiefly in response to the global economic crisis and its impact on the TV industry.
It has included securing Time Warner as a 31% shareholder and exiting one market (Ukraine) whilst beefing up its presence in another (Bulgaria). Most recently, the company secured a long-term deal with SES Astra for the 31.5 degrees East orbital slot in Romania and Bulgaria (December 2010) and added to its growing thematic channel portfolio by launching Doma, a service aimed at female viewers, in Croatia (January 2011).
CME’s results for 2010 show a 9.8% year-on-year increase in net revenues and 45.9% in OIBDA in the fourth quarter. For the year as a whole, the respective changes were 8.1% and -7.0%. The company’s net loss in the fourth quarter was meanwhile just over half of that a year earlier.
The Czech Republic has historically been CME’s most lucrative market and currently accounts for between 35-40% of its total revenues. The local press points out that despite losing both audience (down by four percentage points to 36%) and ad revenue (down by two percentage points to 69%, though its nearest competitor only claimed 23%) in 2010 the company took the unusual step of reducing the cost of advertising by 10%.
Even so, Adrian Sarbu, CME’s president and CEO, expects the Czech market – and indeed the five other the company operates in – to start recovering this year.
CME is well placed to capitalise on that recovery, though the road ahead in what is an increasingly competitive environment will be far from easy.
