Strong TV4 earnings – challenges remain for C More and MTV
A buoyant Swedish advertising market and major successes for non-platform-dependent Swedish quality content paved the way for continued impressive earnings growth for the TV4 Group, whose EBITA rose to SEK 734 million (SEK 662 million in 2015). Although C More was the fastest-growing SVOD (subscription video on demand) service in Sweden, major investment costs led to a further year of losses. In a challenging macro-economic climate, MTV of Finland continued to run at a loss, while Nyhetsbolaget delivered a modest profit. EBITA for the Bonnier Broadcasting Group as a whole was SEK 373 million (SEK 417 million).
“During a year marked by great changes throughout Bonnier Broadcasting, it is a testament to our strength that the TV4 Group posted such good results on the back of its ratings and user successes. This is also a major part of C More’s turnaround, since it has enabled us to continue to make major investments in technology, content and organisation throughout the segment,” says Casten Almqvist, CEO of TV4 and Bonnier Broadcasting.
TV4 Group EBITA for 2016 came in at SEK 734 million (SEK 662 million in 2015), and its operating margin rose to 17 per cent. Earnings growth was based on major ratings and user successes, a continuing buoyant advertising market, and the extensive changes implemented by the TV4 Group over the past few years. In digital terms in particular, 2016 was a record year, with 2.2 million logged-on users on TV4 Play and a new all-time-high for time spent. And although traditional TV viewing fell slightly, the TV4 Group recorded its highest ever share of the ratings; the TV4 channel saw its highest ratings shares in ten years. Digital and linear advertising sales both achieved record highs, and a number of changes were made to tailor our offering even more closely to the individual needs of advertisers, and enhance flexibility. TV4 Group sales rose to SEK 4,314 million (4,234), up 1.9 per cent.
For the second year in a row C More was the fastest-growing SVOD service in Sweden. Its customer portfolio grew by 90 per cent, and both SVOD and digital TV revenues rose in Sweden as well as Denmark. However, further heavy investment in content, technology and organisation, and a slightly slower rate of growth than expected, continued to weigh on operations, and C More again posted a loss. EBITA landed on SEK -307 million*. Key major sporting rights, including SHL hockey, were secured during the year. These will be a central factor in C More’s continued growth.
News reporting by Nyhetsbolaget achieved major successes during the year. These included TV4’s ratings successes during the US presidential election, and a rise in viewing figures for linear and digital news broadcasts. Production of non-platform-dependent journalism grew sharply, particularly for live news. During the year priority was given to growth in new deals, and the number of external productions rose, as did sales. But start-up costs in this highly competitive market meant that earnings were about the same as the previous year, i.e. a modest profit of just under SEK 1 million.
MTV continued to operate in a challenging macro-economic climate in Finland. A new management team was appointed for MTV, and during the autumn major structural changes, rationalisation and investments in local Finnish programme content enabled MTV to reverse the earlier negative trend, as ratings improved towards year-end. A number of key rights were secured during the year. This paves the way for rolling out the C More SVOD service, as is now happening in Finland. Although the negative trend has been reversed, MTV’s EBITA came in at a loss of SEK -56 million.
“The Nordic region is one of the most competitive media markets in the world. We must display humility in the face of this reality. The key lies in always being one step ahead in the way we optimise technological developments, production and programme spending. TV4 and C More intend to continue to offer viewers and users by far the most attractive TV offering, regardless of platform. The same goes for MTV and C More in Finland,” Mr Almqvist comments.
* C More EBITA was affected by group items relating to changes in ownership structure.
Magnus Törnblom, Head of Corporate Press, email@example.com, +46 (0)70 266 27 12.