MONTREAL – Quebecor’s TVA Group announced Wednesday it recorded across the board declines due to softer ad sales at flagship broadcaster TVA and increases in costs from the launch of three new specialty channels.
The company saw a $10,323,000 (103.1%) decrease in the Television sector's operating income compared with the same quarter of the previous year, mainly because of: a 49.2% decrease in TVA Network's operating income due to the combined effect of a 3.3% decrease in operating revenues and an 8.5% increase in operating expenses, including a 7.5% rise in content costs; the operating loss of the new SUN News specialty service partly due to the free preview period; and start-up and operating costs of the new Mlle and TVA Sports specialty services, also during the free preview period.
Overall revenue in the quarter, ended September 30th was $89.2 million, a drop of 5.3%.
"The Television sector's third quarter 2011 financial results were affected as expected by the three new specialty services launched since spring 2011: SUN News, Mlle and, most recently, TVA Sports. With the exception of Mlle, these services were being distributed at no charge during the free preview period and none had yet received broad carriage on all of the country's major broadcast distributors. We are aware of the short-term financial impact of the past year's launches but they are part of the Corporation's strategic investment plan and long-term positioning. We are pleased and satisfied with the TVA Sports launch on September 12, 2011 and its preliminary ratings. However, these investments coincide with a 4.2% decrease in TVA Network's advertising revenues, which is in keeping with the current market trend. On the other hand, our other specialty services continued growing: advertising revenues were up 10.9% and subscription revenues up 7.1% from the same quarter of 2010", said Pierre Dion, president and CEO of the Corporation, in a press release.
