new Viasat Russian operation emerges

National Media Group (NMG) has finalised the acquisition of an 80% stake in Viasat’s Russian pay-TV business.

RNS reports that the joint venture between the two companies will control all Viasat’s Russian channels, which include TV1000, TV1000 Action, TV1000 Russian Cinema and the Viasat Premium HD package.

It adds that the new joint venture will be headed by Alexei Krol.

The majority stake in Viasat’s Russian pay-TV channels were initially acquired by Anatoly Karyakin, the owner of the ad company Gallery, in October 2015.

The sale was undertaken ahead of new rules limiting the foreign ownership of media companies in Russia that came into effect at the beginning of this year.

NMG now finds itself one of the leading players in Russia’s pay-TV industry.

Viasat expands in Ukraine

The Ukrainian OTT service Divan.TV will offer its viewers all Viasat channels available in the country.

Mediasat reports this follows an agreement between the service and Viasat Ukraine and that the channels will be available on all devices as part of a new package named Viasat Premium.

The channels include the HD services TV1000 Premium HD and TV1000 Megahit HD.

Divan.TV is aimed at a Ukrainian and Russian speaking audience of 300 million in 200 countries worldwide.

As previously reported in Broadband TV News, it broke even in Q4 last year.

MTG: Record sales, but mixed pay-TV picture

Modern Times Group (MTG) ended the first quarter with 973,000 premium pay-TV subscribers in the Nordic region, down from the 982,000 and 978,000 posted three months and a year earlier respectively.

While the premium satellite figure continued to fall (514,000, versus 526,000 and 553,000 three months and a year respectively), those via third party networks increased to a total of 459,000 (from 456,000 and 425,000 respectively). Meanwhile, the basic satellite subscriber total continued to fall, with the number as of the end of Q1 at 31,000.

Premium satellite ARPU in Q1 was SEK5,220 (€560.1), compared to SEK5,044 in the corresponding quarter in 2014.

In emerging markets, the satellite subscriber total as of the end of Q1 was 290,000, compared to 358,000 a year earlier. This was in large part due to the closure of the DTH platform Raduga TV in Russia at the end of 2014. On the other hand, the number of mini-pay subscriptions rose from 94,837 to 136,969 in the year to March 31.

MTG notes that in the Nordics, sales growth at constant FX was driven by the expansion of Viaplay. In emerging markets, figures were boosted in the mini-pay channel business by the consolidation of Trace, which added 42 million subscriptions year-on-year and 6 million quarter-on-quarter.

MTG as a whole had net sales of SEK3,701 million in Q1, compared to SEK3,597 million in the corresponding quarter in 2014. Total EBIT was SEK415 million (SEK301 million) and net income SEK318 million (SEK159 million).

Commenting on the results, Jørgen Madsen Lindemann, president and CEO, said: “Record Q1 sales & stable underlying profits Sales were up in the quarter to record levels as enhanced efficiency levels in our traditional businesses continued to fuel the growth of our digital businesses, and even though last year’s performance was boosted by the Olympics. Profits were stable compared to last year when excluding the net positive effect of the restructuring in Sweden and a copyright settlement in Scandinavia, and this is despite significant FX headwinds and continued investments in our digital products. The growth in online viewing is more than compensating for lower linear channel viewing levels in the Nordic region, and our combined Nordic TV businesses grew their sales, and profits were stable despite the FX impacts and when excluding the abovementioned net positive effect. Our Emerging Market free-TV operations generated higher sales and improved profitability in seven out of eight markets as we took shares in generally stable or growing markets. Our Emerging Market pay-TV operations continue to be impacted by the geopolitical crisis and Russia’s ban on advertising on most pay-TV channels. Nice, MTG Radio and MTGx reported stable sales and lower losses on a combined basis”.

Looking to the future, he added: We have now almost finalized the annual upfront agreements for our free-TV businesses, with price increases in most markets reflecting TV’s unique reach and superior return on investment. Viaplay continues to grow its subscriber base and usage levels, while our channel packages are more broadly available than ever before. We have also added new programming content or extended valuable existing rights to ensure that we have the best possible entertainment offerings in each market. We continue to face adverse FX headwinds that are inflating our US dollar content costs in the Nordics particularly, and also reducing the results from our Russian ruble denominated operations. We are taking actions across the Group to offset these effects as much as possible”.

Russia still troubling MTG

MTG says it is continuing to explore its options after the introduction of a law, banning advertising on pay-TV channels, was brought in earlier this year.

In the last few days an amendment to the law, allowing ads on channels where there is 75% Russian content has been introduced, and is awaiting presidential signature.

“We are working with a range of potential solutions, in order to best protect the interests of stakeholders in these entertainment businesses that we have built into the most popular in Russia,” said CEO Jørgen Madsen Lindemann.

Sales across the Baltic markers were up as in line with the local markets the advertising market expanded in Estonia and Latvia, but was down in Lituania.

The pay business has seen its mini-pay channels decline by 3% year on year, when the contribution from Trace, acquired in June 2014, is excluded. 

Russia is excluded from the Baltic figure and its operation CTC Media reports after MTG.

MTG’s Nordic pay-TV business continues to be driven by the expansion of the On Demand Viaplay platform. In a market where the linear market is arguably in decline, premium subscribers remain stable at around 1 million – split 60/40 in favour of satellite homes – though premium satellite ARPU was up 2% at SEK 5,255 after recent price increases.

MTG announces 4Q 2014 results

Modern Times Group MTG AB (publ.) (“MTG” or “the Group”) (Nasdaq OMX Stockholm Large Cap Market: MTGA, MTGB) today announced its financial results for the fourth quarter and full year ended 31 December 2014.

MTG’s Nordic broadcasting business again delivered higher sales and profits, as the growth in our online businesses more than compensated for lower linear viewing levels and declining advertising markets. The Emerging Markets businesses grew their sales on a combined basis but higher profits in the free-TV business were offset by negative pay-TV earnings impacts.

Pay-TV Nordic

The total premium subscriber base was up quarter-on-quarter (q-o-q) and y-o-y, as the growth in the third party network subscriber base more than offset the ongoing decline in the satellite base.

Pay-TV Emerging Markets

The wholesale mini-pay channel business has added 39 million subscriptions y-o-y, with an underlying decrease of 3 million when excluding the contribution from Trace. The combined satellite pay-TV subscriber base continued to decline, which was primarily due to the geopolitical situation in Ukraine.

MTG announced that the Russian digital satellite TV platform Raduga TV would stop its broadcasting services on 5 December 2014 as it had not been granted the required broadcasting license from the local media regulator. MTG also announced that it would launch five new High Definition pay-TV channels in Russia during 2015.

The law prohibiting the sale of advertising on pay-TV channels in Russia has taken effect from the beginning of 2015. An amendment to the law that would allow advertising on pay-TV channels with 75% Russian content is now pending Presidential signature.

Key performance indicators – Subscriber data (‘000s)

                                                          2013                                2014
                                ------------------------------  ----------------------------------
                                    Q1      Q2      Q3      Q4       Q1       Q2       Q3       Q4
                                ------  ------  ------  ------  -------  -------  -------  -------
Pay-TV Nordic

Premium subscribers              1,003     989     970     977      978      970      969      982
- of which, satellite              580     569     563     559      553      546      535      526
- of which, 3rd party networks     424     421     407     418      425      425      434      456
Basic satellite subscribers         45      44      42      40       37       36       35       33

Pay-TV Emerging Markets

Satellite subscribers(1)           366     360     360     364      358      344      326      306
Mini-pay subscriptions(2)       85,153  89,915  91,380  92,223   94,837   94,197  130,559  131,089

1. Have been restated following the closure of Raduga.
2. Includes Trace subscriptions from Q3 2014. MTG acquired 75% of Africa-centric pay-TV operator Trace Partners SAS in June 2014.

CTC looks to the future

Russia’s CTC Media has posted relatively encouraging results against the backdrop of uncertainty over its future ownership.

Q3 revenues were up 3% year-on-year in ruble terms to $158.6 million, while OIBDA rose by 9% in ruble terms to $50.6 million.

However, net income was down by 24% in ruble terms to $31.6 million.

In her comments on the results, Yuliana Slashcheva, CEO of CTC Media, said that the broadcaster is “evaluating a potential transformation” of its channel Peretz.

She also spoke positively about the new structure of Video International, the leading TV ad seller in Russia, despite the company having its own sales house (Everest).

CTC Media cooperates with the ‘new VI’ and will look to do so even further in the future.

Commenting on the new legislation that will place a 20% foreign ownership limit on Russian media companies, she said that CTC Media’s future actions “may include corporate restructuring, franchising and licensing structures, capital reorganisation or divestments”.

Viasat denies Ukrainian charges

Viasat has refuted the findings of an unscheduled inspection of its output in Ukraine by the country’s National Council on TV and Radio.

ProIT and Telekritikareport that the council found Vision TV, which provides satellite TV services in Ukraine under the Viasat brand, was retransmitting the Russian TV channels Rossiya 24, RTR- Planeta and TV Center, as well as distributing a total of 129 channels, rather than the 73 specified in its licence.

One of these channels was the promotional channel Viasat.

In response, Oksana Ferchuk, the deputy director of Vision TV, said that due to the lack of activity by the council in the last six months the company had been unable to apply for any licence renewals.

She also categorically denied the company was relaying any Russian channels in Ukraine, with RTR-Planeta having been withdrawn on March 26 and the others never having been carried.

Ferchuk also said that Viasat was the most obedient satellite operator in Ukraine.

Meanwhile, Gregorij Shverk, the council’s deputy chairman, said that its goal was not to punish Viasat.

Ukrainian boost for Viasat

Triolan, Ukraine’s second largest cable operator, is again distributing Viasat channels.

Its portfolio now includes four movie channels (TV1000, TV1000 Action, TV1000 Comedy and TV1000 Russian Kino), three factual channels (Viasat History, Viasat Nature and Viasat Explorer) and Viasat Sport, which have been made available to all Triolan subscribers.

Commenting on the development, Andrey Burenok, country manager of Viasat Ukraine, said: “We are proud that our movie, factual and sports channels will once again be available to Triolan’s subscribers.. We consider Triolan a sound partner that we can work together with in developing the pay-TV market in Ukraine.”

Triolan last carried Viasat channels in 2012.

Local reports say that Triolan is now in talks with Russia’s NTV-Plus.

If successful, they could result in the operator’s offer increasing to over 100 pay channels by the end of this year.

Viasat boost Russian HD offer

Viasat Russia will launch two sports channels in HD this October.

The two channels – Viasat Sport HD and Viasat Golf HD – will compose a sports included in the Viasat Premium HD package, the cost of which will not be increased.

Viasat Sport is already one of the top 10 most popular sports channels in Russia, reaching over 10 million viewers, while Viasat Golf is dedicated solely to golf.

Viasat Russia is part of Modern Times Group (MTG) and distributes 15 cable and satellite channels in Russia and the CIS.

Viasat Premium HD was launched in November 2012 and is available in major cable networks, including Rostelecom, ER Telecom, MTS, Beeline and Omline, for R400 (€9.3) a month.