France's TF1 Sees Third Quarter Ad Boost From World Cup
However the group is cautious about overall growth prospects for the French ad market
TF1 Group, home to France’s top-rated broadcast network as well as the struggling LCI cable news channel, reported a net profit up 2 percent in the third quarter, attributed in part to a reverse in the group’s free-to-air ad fortunes.
The World Cup gave the ad revenue a much-needed kick for the company. After falling one percent in the first half, ad revenue grew 2.1 percent in the third quarter to $408.4 million (€323.2 million).
However, though the company scored big this quarter, it remains cautious about the overall ad market in France. It noted that while it has increased the volume of ads on its channels, intense competition among the now-25 broadcast channels available has been pushing down prices. The group doesn’t predict an overall change “in terms of either visibility, which remains poor, or intensity of competition in the market.”
Other revenues were up 1.8 percent in the third quarter to $143.8 million (€113.8 million). The consumer products segment, which reported a fall in revenue after the group unloaded its online shopping site earlier this year, held roughly steady in home shopping. Sales of physical video slipped, and the group noted what it characterized as “poor performance” in its pay-tv segment.
It has been trying to move its struggling CNN-style news network LCI free-to-air arguing that the cable ad market is too soft.
The group saw a $11.6 million (€9.2 million) rise increase in the overall programming budget for its four free-to-air channels in the third quarter, but this also included the World Cup. Outside of the big sporting event, program spending was actually down about $11.2 million (€8.8 million) in the third quarter. This reflects the group’s overall “optimization plan,” implemented in 2012, to cut spending and decrease costs company-wide.
TF1’s core channel, which airs hits such as The Mentalist and Criminal Minds in France, remains the number one network, with an overall 28.8 share of the market – on par with last year’s numbers – and women under 50, which the company called the household “purchasing decision-makers,” grew a half point to 32.6 percent market share.
For the first nine months of the year, the group’s net profit was also boosted by a capital gain of $371.2 million (€293.8 million) from the sale of a 31 percent stake in the Eurosport international channels to Discovery Communications which closed in May, it noted.