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Buddy can you spare a quarter?
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Buddy can you spare a quarter? - 19-February-2009, 18:10

Buddy can you spare a quarter?

| February 19, 2009

Europes pay-TV finances are doing their level best in a difficult market,

writes Julian Clover

Midway through February and of the key industry companies have now published their financial reports for 2008. The remainder will do so over the next couple of weeks.

It was in the last quarter of 2008 that the credit crunch really began to bite and companies in all industries began to assess in earnest how they might face out the recession. It is somewhat churlish to say so far so good, when thousands around the world are losing their jobs, but early indications suggest that those involved in multiplatform television are more than capable of seeing it out.

That does not mean a wave of complacency is sweeping through the board room, even those businesses like BSkyB and Viasat that have reported positive results, have gone on to warn about the potential problems that they face. When in around three months time we report on the first quarter results it may well be that bad news has translated into lower subscribers, higher churn and falling ARPU.

Satcasters like Premiere that have reported bad results were already in the soup. The German pay-TV operation had previously flagged the problems that they face and how the new management team intends to address them. One can always question whether the 114.3 million Q4 loss would have been any better were it not for Europes current financial pain, but the suggestion is that it would not.

Indeed reported results have all followed the patterns that had already formed during the previous nine months of 2008. The subscriber losses that have been seen in the Scandinavian DTH sector have been there all year; the two villains being IPTV and DTT as the region completes the digital switchover process.

It is the move to DTT that is responsible in part for the erosion of basic analogue subscribers in markets where the terrestrial proposition is essentially free. Of course this doesnt stop some people trying to compare the success of DTT with pay-TV operations, but this is missing the point, with everyone moving to digital broadcasting the success of DTT is as likely as day following night.

Pay-TV operators will quite rightly point to the expense in reclaiming a subscriber should they move to another operator, but arguably if they are moving to a free service, they are never going to do anything for average revenues.
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