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Headline, Industry News
Astral Media profit up despite flat TV revenue
Thursday April 12th 2012TORONTO – BCE Inc. is betting its $3-billion purchase of Astral Media Inc. can help maintain growth within key areas of its telecommunications business, in part by harnessing the latter’s programming to Bell’s wireless, Internet and television networks.
While analysts say the strategy is largely an unproven one, what’s certain is that BCE likely isn’t buying Astral for the takeover target’s organic upside. The Montreal-based television, radio and advertising company continued to exhibit signs of slowing growth last quarter, resorting to squeezing profits from cost-cutting efforts.
Consolidated revenues across Astral’s business lines were flat, the company said Wednesday, as pay-TV subscriber additions came in lower than the year-prior period and advertising on specialty networks like Teletoon and Family remained sluggish. The company, which was bid on by BCE on March 16, said earnings rose 10%.
One catalyst being banked on for growth is the launch of a new HBO Go service that will stream hit programming from the U.S. pay network, such as its Game of Thrones series, to computers and mobile devices on demand. Astral’s HBO Canada channel is one among a stable of 24 premium pay-television and specialty services that make up the biggest component of the media company.
The HBO platform, which is tethered to a subscriber’s cable bill, has attracted millions of users in the United States since launch and blunted the appeal of competing online providers, such as Netflix Inc.
Astral chief executive Ian Greenberg, who will join BCE’s board after the deal passes regulatory review and closes later this year, said the new service will be released this fall. A stumbling block to a Canadian launch has been convincing big TV and wireless distributors such as Rogers Communications Inc. to pick up and market the service.
The executive said progress has been made in recent months, but did not specify which operators have struck agreements. Analysts speculate that with BCE’s bid in play, the provider could be among the first to offer HBO Go to its subscribers. The service would compliment Bell Mobility’s existing mobile television product, which, despite ongoing talks with competing carriers, remains exclusive to Bell.
“We would hope we will have the majority, though today we’re still working with our [distribution] partners,” Mr. Greenberg said on conference call.
Astral is looking for ways to expand that alleviate pressure in its core services in television and radio, the latter suffering another 3% dip in revenue as the local advertising market lagged a pickup in national. Margins were maintained however through cost reductions. The company’s emerging outdoor advertising unit, a small but fast-growing business, is a bright spot with revenue climbing 8% in the second quarter.
Roughly 1,000 subscribers were added to Astral’s pay-TV lineup, which included gains to The Movie Network and Super Ecran. The rise failed to make up for losses in recent quarters that have driven down Astral’s base by about 2%, to 1.87 million customers.
“Subscriber growth is clearly maturing,” one analyst source said.
Adjusted net income for the three months ended Feb. 29 was $38.2-million (69 cents a share), compared $34.7-million (60 cents) in the same period a year ago. Revenue was flat at $233.5-million.
Source: Financial Post
Headline, Industry News
Astral Media profit up despite flat TV revenue
Thursday April 12th 2012TORONTO – BCE Inc. is betting its $3-billion purchase of Astral Media Inc. can help maintain growth within key areas of its telecommunications business, in part by harnessing the latter’s programming to Bell’s wireless, Internet and television networks.
While analysts say the strategy is largely an unproven one, what’s certain is that BCE likely isn’t buying Astral for the takeover target’s organic upside. The Montreal-based television, radio and advertising company continued to exhibit signs of slowing growth last quarter, resorting to squeezing profits from cost-cutting efforts.
Consolidated revenues across Astral’s business lines were flat, the company said Wednesday, as pay-TV subscriber additions came in lower than the year-prior period and advertising on specialty networks like Teletoon and Family remained sluggish. The company, which was bid on by BCE on March 16, said earnings rose 10%.
One catalyst being banked on for growth is the launch of a new HBO Go service that will stream hit programming from the U.S. pay network, such as its Game of Thrones series, to computers and mobile devices on demand. Astral’s HBO Canada channel is one among a stable of 24 premium pay-television and specialty services that make up the biggest component of the media company.
The HBO platform, which is tethered to a subscriber’s cable bill, has attracted millions of users in the United States since launch and blunted the appeal of competing online providers, such as Netflix Inc.
Astral chief executive Ian Greenberg, who will join BCE’s board after the deal passes regulatory review and closes later this year, said the new service will be released this fall. A stumbling block to a Canadian launch has been convincing big TV and wireless distributors such as Rogers Communications Inc. to pick up and market the service.
The executive said progress has been made in recent months, but did not specify which operators have struck agreements. Analysts speculate that with BCE’s bid in play, the provider could be among the first to offer HBO Go to its subscribers. The service would compliment Bell Mobility’s existing mobile television product, which, despite ongoing talks with competing carriers, remains exclusive to Bell.
“We would hope we will have the majority, though today we’re still working with our [distribution] partners,” Mr. Greenberg said on conference call.
Astral is looking for ways to expand that alleviate pressure in its core services in television and radio, the latter suffering another 3% dip in revenue as the local advertising market lagged a pickup in national. Margins were maintained however through cost reductions. The company’s emerging outdoor advertising unit, a small but fast-growing business, is a bright spot with revenue climbing 8% in the second quarter.
Roughly 1,000 subscribers were added to Astral’s pay-TV lineup, which included gains to The Movie Network and Super Ecran. The rise failed to make up for losses in recent quarters that have driven down Astral’s base by about 2%, to 1.87 million customers.
“Subscriber growth is clearly maturing,” one analyst source said.
Adjusted net income for the three months ended Feb. 29 was $38.2-million (69 cents a share), compared $34.7-million (60 cents) in the same period a year ago. Revenue was flat at $233.5-million.
Source: Financial Post
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Headline, Industry News
Astral Media profit up despite flat TV revenue
Thursday April 12th 2012TORONTO – BCE Inc. is betting its $3-billion purchase of Astral Media Inc. can help maintain growth within key areas of its telecommunications business, in part by harnessing the latter’s programming to Bell’s wireless, Internet and television networks.
While analysts say the strategy is largely an unproven one, what’s certain is that BCE likely isn’t buying Astral for the takeover target’s organic upside. The Montreal-based television, radio and advertising company continued to exhibit signs of slowing growth last quarter, resorting to squeezing profits from cost-cutting efforts.
Consolidated revenues across Astral’s business lines were flat, the company said Wednesday, as pay-TV subscriber additions came in lower than the year-prior period and advertising on specialty networks like Teletoon and Family remained sluggish. The company, which was bid on by BCE on March 16, said earnings rose 10%.
One catalyst being banked on for growth is the launch of a new HBO Go service that will stream hit programming from the U.S. pay network, such as its Game of Thrones series, to computers and mobile devices on demand. Astral’s HBO Canada channel is one among a stable of 24 premium pay-television and specialty services that make up the biggest component of the media company.
The HBO platform, which is tethered to a subscriber’s cable bill, has attracted millions of users in the United States since launch and blunted the appeal of competing online providers, such as Netflix Inc.
Astral chief executive Ian Greenberg, who will join BCE’s board after the deal passes regulatory review and closes later this year, said the new service will be released this fall. A stumbling block to a Canadian launch has been convincing big TV and wireless distributors such as Rogers Communications Inc. to pick up and market the service.
The executive said progress has been made in recent months, but did not specify which operators have struck agreements. Analysts speculate that with BCE’s bid in play, the provider could be among the first to offer HBO Go to its subscribers. The service would compliment Bell Mobility’s existing mobile television product, which, despite ongoing talks with competing carriers, remains exclusive to Bell.
“We would hope we will have the majority, though today we’re still working with our [distribution] partners,” Mr. Greenberg said on conference call.
Astral is looking for ways to expand that alleviate pressure in its core services in television and radio, the latter suffering another 3% dip in revenue as the local advertising market lagged a pickup in national. Margins were maintained however through cost reductions. The company’s emerging outdoor advertising unit, a small but fast-growing business, is a bright spot with revenue climbing 8% in the second quarter.
Roughly 1,000 subscribers were added to Astral’s pay-TV lineup, which included gains to The Movie Network and Super Ecran. The rise failed to make up for losses in recent quarters that have driven down Astral’s base by about 2%, to 1.87 million customers.
“Subscriber growth is clearly maturing,” one analyst source said.
Adjusted net income for the three months ended Feb. 29 was $38.2-million (69 cents a share), compared $34.7-million (60 cents) in the same period a year ago. Revenue was flat at $233.5-million.
Source: Financial Post
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