Pro7 H1 figures show recovery in ad market

Europe's 2nd largest b'caster sees profits more than double

COLOGNE, Germany – Western Europe's television market is bouncing back from the recession but ad revenues remain well below post-bust heights.

ProSiebenSat.1, Europe's second largest broadcaster posted first half results Thursday showing revenues up 7.4% to $1.9 billion (€1.42 billion) and profits more than doubling to $126 million (€95.7 million).

Similarly strong figures from ITV in Britain, TF1 in France, Telecinco in Spain and Mediaset's Italian TV business point to a broad recovery in the Western European market, driven by surge in traditional TV spot advertising.

The picture is more mixed in Eastern Europe. Top Russian broadcaster CTC Media saw revenue jump 16% in the first half, even as profits slumped, In several European territories, ad revenue continued to fall.

East or West, diversification remains the buzzword as evidenced by ITV's move into pay TV and growing online divisions at all major European networks. Few expect traditional TV advertising to return to the heights seen 3-4 years ago. Going online, charging for digital or on-demand channels and branching out into merchandising are just some of the strategies networks are using to keep growth going.

But old school ad revenue still pays the bills.

At ProSiebenSat.1, 87.4% of its sales in the second quarter came from free-TV across Europe. The company's diversification business -- a catchall category including pay TV, VOD, and online sales of ads, music and other goods and services -- contributed just 12.6% to the bottom line.

In Germany, Europe's largest television market, ProSieben's revenue hit $1.15 billion (€876.4 million), on par with figures from 2008 but still sharply down from the $1.26 billion the group earned pre-crash in 2007. ProSieben painted a sunny picture across much of Europe, also citing strong ad growth in Benelux and Scandinavia. Gross advertising revenues were up 15% in Germany, 16% in Sweden and nearly 9% in the Netherlands in the first half of the year.

Things are less rosy in Central and Eastern Europe. In Hungary, gross advertising revenues slipped nearly 3% in the first half and Romanian saw a steep 12% plunge, according to ProSieben's figures.

The recovery in Russia, one of the territories hardest hit by the crash, appears to be faster than most of the East. CTC expects total TV advertising sales in Russia to jump 10% this year.