Loss Up at Premiere

MUNICH, August 7: There
was an 18.9-percent gain in second-quarter revenues to 272.4 million euros at
German pay-TV giant Premiere, but the company still posted a wider loss, of
37.8 million euros, versus the 32.6 million euros loss recorded in Q2 2007.

Piracy was among the
problem spots cited by the company for this quarter. As at June 30, 2008,
Premiere had a total of 4.16 million customers. Of this, 3.55 million are
direct subscribers, with the balance being indirect customers via arena.
Compared with Q1 2008, Premiere registered a decrease of 84,657 customers.

Michael Börnicke, the CEO
of Premiere, said: “In view of the piracy problems, our Q2 performance met our
expectations. We are now looking ahead. Premiere will soon have closed the
security gap. We are aiming for high growth in the second half of the year,
with many new customers and a higher ARPU.”

The platform has begun
implementing new encryption technology from NDS Videoguard and Nagravision.
Satellite customers are receiving their new smart cards in a process that
should be complete by the end of the third quarter. “The conversion is going
according to schedule and the security gap will be closed soon. Anyone who has
purchased a hacked receiver will soon realize that Premiere is only be
available to Premiere subscribers.”

The turnaround strategy
for the company also includes a new marketing campaign, with 40 million euros
set aside for advertising. Part of the consumer-focused initiative includes
highlighting the football lineup of the Bundesliga, the DFB Pokal and the UEFA
Champions League. “High-quality and exclusive sports rights are a central
element of our marketing strategy,” Börnicke says. “For the first time ever,
starting with the new season, Premiere will be showing the football triple. All
the games, all the goals, live, in the live highlights format and in the round
up. Never before has there been such extensive coverage of the three biggest
football competitions.”

Meanwhile, the future of
the highly coveted Bundesliga on Premiere remains unclear. Börnicke notes: “We
have always underlined that Premiere is prepared for all scenarios. Once we
have received the bidding documents we will examine the models and packages it
contains and submit corresponding bids. The latest developments have not
changed our position. Above all, we want to, and we will, make sure that we can
continue presenting the Bundesliga to our customers. No decision has yet been
made about the structure of the award of the rights and we still believe that
our chances of acquiring the rights to the Bundesliga football with higher
exclusivity overall are good.”

—By Mansha Daswani