2017-02-10

Stockholm, 10th of Feb 2016

SUMMARY: 

Strong TV4 earnings – challenges remain for C More and MTV

  • Bonnier Broadcasting reports EBITA for 2016 of SEK 373 million, on sales of SEK 7,396 million. Earnings reflect a year in which there was a quickening shift in focus from viewer to user, and a continuing process of transition. A new central parent – Bonnier Broadcasting AB – was formed, to which some 300 employees were transferred to begin working across the entire division. Bonnier Broadcasting continue to make major investments in technology, content and organisation throughout to succeed with C More’s and MTV’s turnaround
  • The TV4 Group posted strong earnings, with profit rising to SEK 734 million (SEK 662 million in 2015), up 11 per cent. Sales rose to SEK 4,314 million (SEK 4,234 million), and the operating margin rose to 17 per cent (15.6 per cent).
  • TV4 Group earnings are based on major ratings and user successes achieved thanks to our continuing commitment to non-platform-dependent local quality content, whatever the genre. Other factors are a continuing buoyant advertising market and a wide-ranging process of change, so we are better able to meet developments both in the advertising market and in technology and content. The year saw a large number of new digital records, including 2.2 million logged-on users of TV4 Play and a new all-time-high for consumption. PUT fell during the year, but the TV4 Group increased its audience share, achieving an all-time-high of 32.4 per cent. The TV4 Group grew its national and digital sales, and also increased its market share.
  • 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. However, further necessary major investments in content/rights, technology and organisation, and a slightly slower rate of growth than expected, continued to weigh on earnings. EBITA came in at SEK -307 million.
  • News reporting by Nyhetsbolaget achieved major successes, with sharply increased production of non-platform-dependent journalism for TV4 and TV4 Play, particularly during the US presidential election, and also noted a sharp rise in linear and digital news consumption. During the year priority was given to growth in new production deals, which saw a rise in revenue. But start-up costs weighed on earnings, resulting in a modest profit in line with the previous year (SEK 1 million).
  • MTV continued to operate in a challenging macro-economic climate in Finland. A new management team implemented further structural changes, rationalisation and investments in local Finnish programme content, thereby managing to reverse the negative trend during the autumn, and to increase audience share. In addition, a number of key rights were secured prior to rolling out the C More SVOD service in Finland in February. Although the negative trend was reversed, MTV reported a loss of SEK -56 million.

EBITA BONNIER BROADCASTING:

Million SEK

Full year 2015

Full year 2016

Change

TV4

 

 

 

Sales

4,234

4,314

80

EBITA

662

734

73

Nyhetsbolaget*

 

 

 

Sales

463

EBITA

1

MTV*

 

 

 

Sales

1,923

EBITA

-56

C More*

 

 

 

Sales

1,407

EBITA

-307

Bonnier Broadcasting

Sales

7,789

7,397**

-392

EBITA

417

373

-44

*EBITA and sales for Nyhetsbolaget, MTV and C More were not previously included in the annual financial statements. For C More, group items relating to ownership changes also affect EBITA, which means some relevant comparative figures are lacking. The comparative figures have therefore been omitted.
**Sales after intra-group eliminations.

TV4 GROUP

2016 was a good year for the TV4 Group in terms of viewing and consumption. Digital services in particular broke several records – including no fewer than 2.2 million logged-on users on TV4 Play in a mere seven months, and a new all-time-high for both time spent (over 64 million hours) and news consumption, which grew by over 50 per cent. Among the commercial TV operators monitored by MMS in 2016, TV4 Play accounted for two-thirds of digital consumption, in terms both of streaming starts and time spent.

Traditional TV viewing fell somewhat, to 2 hours and 29 minutes per person and day (down 5.5 minutes). The TV4 Group withstood the fall in PUT well; each person spent an average of 46 minutes a day watching TV4 Group channels (a decrease of 1 minute). Thanks to this, the TV4 Group achieved a 32.4 per cent audience share among its 15–64-year-old main target group (31.7 per cent in 2015), its highest audience share ever. The figure for the TV4 channel was 21.1 per cent (20.9), its highest viewing figures for ten years. And TV12 remains Sweden’s fastest-growing TV channel. Sjuan’s figures fell slightly.

TV4’s strategy of non-platform-dependent quality content in all genres continues to reap rewards in drama and entertainment as well as sport, current affairs and news. TV4 has scored major successes in its news reporting in particular. Our broadcasts during the US election were the jewel in the crown, bearing our main competitor, SVT, for the first time, in both linear and digital services.

One growth area was Köket (“the Kitchen”), the TV4 Group’s “food ecosystem”. The autumn saw the launch of a subscription service, offering products, recipes and hints, all gathered in the “Kitchen” box. Recept.nu was relaunched as Köket.se and broke traffic records. Köket.se also won three prestigious prizes in 2016. Internetworld voted it “Food Site of the Year”. It also won the Publishing Prize for best information site, and won a silver in the editing category of the Swedish Design Prize. The ENT creative talent network continues to grow, launching a series of new digital content formats, solutions and partnerships during the year.

For more information about TV viewing and communication, see “the Viewing and Consumption year 2016”.

SALES AND MARKET

2016 saw numerous improvements in the TV4 Group advertising offering, and the sales organisation around the country was adapted to better meet the specific needs of each advertising customer. Among other things, we introduced the opportunity to make “pre-specifics” bookings, three months in advance, offering advertisers greater flexibility. Another addition was programmatic sales, new target groups for national TV, new digital target groups based on TV4 Play log-ins and validated first-party data, along with a completely new local total TV product, combining online TV with linear TV.

With over two million logged-on users on TV4 Play and a technical infrastructure ensuring that only validated first-party data are included in the target groups purchased by advertisers, the WOO video alliance – comprising TV4 Play, Expressen TV, DN TV and Di Play – enhanced and cemented its position during the year as the most attractive Swedish commercial video advertising offering. According to MMS Trend & Tema for Q4 2016, WOO was by far the largest Swedish commercial video operator, with a weekly reach of 29.3 per cent, whereas, by way of comparison, Aftonbladet TV’s weekly reach fell to 18.3 per cent.

According to IRM’s December forecast (results for the full year will not be published until 28 February 2017), total media spending increased by 5.7 per cent in 2016, to SEK 34,775 million. Web TV is estimated to have grown to SEK 1,146 million, up 24.6 per cent. Total TV spending is expected to have fallen by 1.6 per cent, to SEK 5,405 million. But TV4 Group sales rose slightly, by 0.2 per cent, thereby increasing the group’s market share. The decline in traditional TV advertising spending is less (SEK 89 million) than the increase for web TV (SEK 226 million).

National advertising sales for TV4, TV12 and TV4 Guld, and advertising sales for TV4 Play all broke records. National sales grew by 4 per cent, digital sales by 22 per cent, and local digital sales by 200 per cent.

Just as before, the TV4 Group remains the unchallenged premier TV operator in terms both of reach and TRP*** deliveries to the advertising market. Although TV4 Group reach fell slightly, the decrease was considerably smaller than that for MTG and Discovery Networks, both among TV4 Group target groups and among those of our competitors.

TV operators delivered a total of 1,098,000 TRPs to the advertising market among the 15–64-year-old target group, down 4.2 per cent (representing just over 47,500 ratings). The TV4 Group increased its share of the total number of TRPs sold to 50.2 per cent, whereas MTG’s share was 25.8 per cent, and that of Discovery Networks 20.0 per cent. The TV4 channel alone delivered a substantially higher number of TRPs than MTG as a whole, or Discovery Networks as a whole.

  • TRPs delivered by the TV4 Group fell by 1.1 per cent, down 5,900 on 2015. The TV4 channel produced 7,800 fewer TRPs than in 2015 (down 2 per cent), and Sjuan lost 10,300 TRPs (12 per cent). TV12, which was still growing, bucked the trend, producing 6,000 TRPs more (up 19 per cent), and was also the channel that grew its TRP production most of all commercial channels.
  • Overall, MTG lost 2.4 per cent (equivalent to 6,900 TRPs), despite the summer Olympics. The decline was greatest for TV6, which lost 9,000 TRPs (9 per cent), whereas TV3 increased its TRPs by 1,100 (1 per cent).
  • Discovery Networks lost 11.9 per cent (equivalent to 29,800 TRPs). Kanal 5 lost over 15 per cent (19,800 TRPs), whereas some of the smaller channels produced more TRPs.

*** TRP, Target Rating Point, 1 TRP=1 per cent of viewing among a specific target group. The figures refer to TRP delivery among TV4’s 15–64-year-old main target group.

C MORE

Thanks to numerous improvements in technology and content and successes – and with greater focus on offering viewers and users the best local sports and drama content – C More continued, for the second year in a row, to be the fastest-growing SVOD service in the Swedish market. Its customer portfolio grew by 90 per cent, and SVOD and digital TV revenues in Sweden and Denmark grew by over 50 per cent.

However, continuing heavy investment in content, technology and organisation, and slightly slower growth than anticipated, continuing to weigh on EBITA, which came in on a SEK -307 million loss****.

During the year C More secured several key local sporting rights for a long time to come, including SHL ice-hockey (premier division), Hockeyallsvenskan (Division 1) and all Swedish and European international football matches. These rights will play a major part in C More’s continuing growth in the coming years. The same is true of the investments made in quality original Swedish drama during the year, which will result in four new Swedish drama series in 2017, exclusively premiered on C More, among them Saknad, Farang and Modus 2.

Investment in technology has risen sharply, which was necessary, both to transform C More from its position as a content provider only, to a technology and customer-focused digital-first company, and to increase the stability and functionality of the service. These efforts resulted in an 80-per cent drop in customer-related technical problems during the year.

February 2017 sees the launch of the C More SVOD service by MTV in Finland.

**** C More EBITA were affected by group items relating to changes in ownership structure.

NYHETSBOLAGET

2016 was a year marked by major news reporting successes for Nyhetsbolaget on all platforms, and rapid growth in new production deals, in addition to the basic services ordered by TV4.

News coverage by TV4 and TV4Nyheterna increased during the year, both in extent and in popularity. TV4Nyheterna Live began broadcasting more or less around the clock, seven days a week. And consumption of live news rose sharply – viewing of news and reports on TV4 Play increased by 50 per cent during the year. Both the 10 O’clock News and Nyhetsmorgon (breakfast news programme) grew their linear and digital audience. During the US presidential election TV4 was the first choice among viewers and users, and TV4’s extended election broadcast beat SVT for the first time.

In addition to its focus on delivering non-platform-dependent journalism for TV4, priority was also given during the year to growth in new production deals. The number of productions rose sharply, and Nyhetsbolaget produced no fewer than nine series of programmes for TV4 Group and Discovery TV channels, including Stjärnkusken, Vägens hjältar, Tunnelbanan, Det stora tårtslaget and Camping Queens.

Nyhetsbolaget has also received a number of orders for other video and animated productions from external customers. Together, these productions led to a sharp increase in new production sales. But start-up costs in this highly competitive market meant that earnings were about the same as the previous year, with Nyhetsbolaget reporting a modest profit of just under SEK 1 million.

MTV

MTV continued to operate in a challenging macro-economic climate in Finland, where advertising spending overall fell by 0.2 per cent and spending on TV advertising fell by 1.1 per cent. During a difficult spring for ratings the World Ice-Hockey Championships bucked the trend, with half the population following Finland’s progress.

Structural changes, rationalisation and investments in local Finnish content implemented by the new MTV management team succeeded in reversing the negative trend after the summer. Towards the end of the year MTV’s audience share increased once again, both for local entertainment and for news, which saw impressive digital and linear growth. MTV ended the year as clear market leader.

Several important rights were secured late in the year, including Formula 1 motor racing and the Mumins. These, together with, among other things, the World Ice-Hockey Championships, and the best national and international film and drama offerings, will prepare the ground for rolling out the C More SVOD service, also taking place in Finland in February 2017.

Although the negative trend has been reversed and prospects look better for the future, MTV reporting a loss of SEK -56 million.

MISCELLANEOUS

  • 2016 saw the creation of a new central parent – Bonnier Broadcasting AB – for the entire segment (TV4 AB, C More Entertainment AB, MTV OY and Nyhetsbolaget AB). Some 300 employees working on content, technology, legal services, accounting and finance and communication were transferred to the company.
  • A joint drama department and a joint sports hub for TV4 and C More have been coordinated on the content side under the umbrella of the new parent. The drama initiative will mean more resources for local Swedish original drama, premiering on C More and then being shown on TV4. Four original series scheduled for these two platforms will be premiered in 2017. And by joining together C More’s and TV4’s sports departments to form a new joint in-house sports hub, the TV4 Group has created Sweden’s leading sports desk for moving pictures, where all sports offerings from TV4 and C More will be gathered.

Press contact:
Magnus Törnblom, Head of Corporate Press, Bonnier Broadcasting, magnus.tornblom@bonnierbroadcasting.com, +46 (0)70 266 2712