The TV industry currently finds itself in unchartered waters due to the global pandemic.
This is becoming increasingly clear as the first Q1 results start to come in. Netflix, which released its earlier this week, spoke about a “temporary acceleration” in membership numbers due to home confinement. While it also forecast a return to normal or expected growth once this is lifted around the world, it conceded that “this is mostly guesswork. The actual Q2 numbers could end up well below or well above that, depending on many factors”.
Meanwhile, Central European Media Enterprises (CME), which is currently in the process of being sold to the Czech Republic’s PPF Group, has just reported that its actual Q1 net revenues were 1.9% lower than a year earlier. Its net income, on the other hand, was down a much higher 23.7%.
The company’s TV stations were adversely affected by reductions in ad spend in March and these are expected to continue this quarter. However, its management believes CME is in a strong enough financial position, thanks in large part to a strong 2019, to ride out the storm.
In Poland, Cyfrowy Polsat, one of the country’s leading media groups, issued a detailed statement earlier this week on how it expects the pandemic to impact on its operations and financial prospects. While it sees its core business model as relatively resistant due to relying on a large base of contract customers, it also expects a slowdown in the TV ad market, though it is impossible to estimate how big this will be.
Another perspective on the uncertain times we currently find ourselves in was provided by Russia’s Gazprom-Media. Speaking in an online conference, Dmitry Pashutin, the head of development and monetisation of internet projects at its sales house, said that the “crazy increase in TV viewing” that has been seen around the world is already being rolled back in China and won’t last. In his view, what is important is for broadcasters to maintain their content activity and for OTT players to convert viewers currently accessing their services for free into paying customers.
Clearly this is an exceptional time for the TV industry. Perhaps the only prediction we can make with some degree of certainty in Q2, or the ‘corona quarter’, is that things will never quite be the same again.