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Still reflecting the shaky ad market in France, TF1 Group‘s advertising sales were down 1.2 percent in the fourth quarter to $550 million (€482.4 million), it said in its latest earnings report released on Thursday.
The company, which is home to France’s top-rated channel, said it believes the ad market will rebound as the French economy stabilizes. However, it noted that despite being the number one network in the country, its own visibility is obscured as more and more free-to-air channels are in the marketplace.
TF1 channel increased its overall audience share 0.1 percent to 22.9 percent of people aged 4 and up, and held 95 of the top 100 rated shows of the year.
Rival M6 has been steadily increasing its ratings and after shaking up its management and bringing in 46-year old Frederic de Vincelles as programming director last December, it is eating into TF1’s market share.
“We think the statement shows some confidence but reinforces our view that M6 is well placed to benefit in a French advertising recovery scenario,” said Liberum Capital Markets analyst Ian Whittaker.
TF1’s teleshopping segment offset the slowdown of the physical videos sales market, which was down 2.8 percent, though the company noted those losses were mitigated by growth in VOD.
Pay TV revenues were affected by competition from the free-to-air channels, particularly its LCI news channel, which the group has been fighting to take free-to-air or threatened to shut down. LCI saw losses of over $9.1 million (€8 milllion) in 2014, up from -$7.6 million (€6.7 million) last year. Their free daily newspaper Metronews also saw losses from the depressed ad market, bleeding over $11.4 million (€10 million).
Shareholders will also get a big dividend of $1.71 (€1.50) per share, mostly due to the revenue from selling a controlling interest in its channel Eurosport last year to Discovery Communication for $1.2 billion.
Aside from the cost from airing 28 World Cup matches, the cost of spending on programming was down $30.1 million (€26.4 million) in 2014, as part of the group’s savings initiatives and its “flexible approach to scheduling in response to the competitive environment.”
Much of TF1’s programming has been hit American shows, including hits The Mentalist, Person of Interest and Criminal Minds. As The Mentalist — France’s number one program years running — comes to a close, the network is looking to replace the hit with additional Hollywood programming. It recently picked up the new CSI: Cyber, The Mysteries of Laura, The Flash, Gotham and Stalker for its fall schedule, though it may be spending less on those shows because of its program cost-cutting measures.
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