There’s no getting away from the fact that CME’s latest set of results are hugely disappointing.
However, the company remains one of the leading operators of commercial TV services in Central and Eastern Europe and is likely to be so for the foreseeable future.
Here’s a little history. I go back a long way with CME, or Central European Media Enterprises to give it its full title. Two decades, in fact, as I was a guest at their first station launch – TV Nova in the Czech Republic – in the early 1990s
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Over that time I have seen the company firstly undergo dynamic growth, then almost brought to its knees by a dispute with a former partner (Vladimir Zelezny in the Czech Republic), pull out of some markets (Poland and Ukraine) and enter others (Bulgaria) and finally find a powerful investor – Time Warner – that almost certainly saved it from going down.
I have also seen it reinvent itself, especially in the last half-decade or so, and it is now much more than a broadcaster.
Content has been at the heart of this change and in each of its six markets it now operates a portfolio of thematic channels and the on demand service Voyo (or ‘Oyo’ in Croatia).
While the latter hasn’t exactly set the world alight in terms of take-up, it clearly demonstrates CME’s desire to remain at the forefront of developments in the new OTT and multiscreen environment.
So, what exactly has gone wrong? As an operator of commercial TV services, CME has been hard hit by the recent slump in the ad market
across the CEE region. Its problems came to a head in the first half and second quarter of this year with a disappointing performance in the Czech Republic, hitherto its most lucrative market, which ultimately transformed a profit into a loss.
CME now says that its strategy of raising TV ad prices – by double digits in the Czech Republic and single digits in its other markets – is starting to pay off. It has also raised carriage fees in Romania and Bulgaria, and though negotiations with some partners are still ongoing, these, too, will in due course impact positively on the company.
While certainly not out of the woods, CME now expects to start growing again next year.