European TV Companies Soar on Game Shows, Digital Media and Eastern Europe

Authored by Jay Baage on July 27, 2006 - 8:48am.

Dutch and Swedish Television Companies Endemol and MTG, respectively, had very strong second quarters. Endemol stated that management "remain very confident about the full year results" and MTG stated that the company is "firmly on track to deliver our five year strategic objectives, and have enabled us to generate a 26% return on average capital employed over the past twelve months. "

Notable this quarter for Endemol, Growth in Non-scripted was +24.1% and in Scripted +3.7%. Digital Media content, including interactive and mobile, grew by +38.2% from 37.6 to over 50 million Euro.

Also interesting is that Endemol, most famous for reality shows ”Big Brother” and ”Fear Factor” is now re-focusing on game shows. Elías Rodríguez-Viña, CEO of Endemol: ”Especially remarkable has been the performance of Deal or No Deal, which has triggered an increasing appetite for game shows, one of the core elements of our product portfolio. We have leveraged this increasing demand by closing a number of deals in various territories on game shows.”

While Endemol’s founder and billionaire John de Mol has sold Endemol, his new media company Talpa Media, which he started in 2004, is also growing and expanding internationally. Earlier this year, he started Talpa Scandinavia and recruited Anna Brakenhielm, former CEO of MTG's production house Strix Television, responsible for successfully bringing “Expedition: Robinson” on air in Sweden, a format which eventually came to the U.S. via Mark Burnett as “Survivor”, officially launching the global reality TV trend.
According to Brakenhielm, her main objective at Talpa is to develop internationally viable formats for television and new media. It will be interesting to see what she and John de Mol can cook up together.
MTG, the international media group with operations in more than 30 countries around the world and principal broadcasting businesses in Scandinavia, the Baltic States, Hungary and Russia, had its strongest second quarter so far.

Most notable is that MTG Broadcasting net sales were up 40% and operating income up 66% (!). Hans-Holger Albrecht, President and CEO, commented: "Record second quarter and first half year results again reflect continued growth and increasing profitability in each of our three key broadcasting businesses, with a particularly strong performance by the Central and East European operations and assets. The IPO of CTC Media has highlighted the value creation that is possible in these high growth markets, with the $83 million that we have invested to date for our 39.6% current shareholding valued at $1.1 billion by the public equity markets at the end of the quarter. “

Strix Television is as a leading provider of reality-TV formats to the international television market. Strix´ catalogue of 32 formats has successfully been sold to broadcasters and production companies in 73 countries around the world and consistently broken local TV viewing records.

Among its new formats is the controversial “Ruth 66” which lets a gaggle of pensioners go on a wild road trip across the nation. It has already turned into a ratings hit in Portugal, where it also proved that 87 year-old participants are able to attract young audiences.

Related Links:
http://www.endemol.com
http://www.mtg.se/