​Media-Business segment’s consolidated income for third quarter of 2020 increases by 9%
27 November 2020

Gazprombank released its financial results for the period of January-September 2020 on November 27. Key indicators for Gazprom-Media Holding are represented as part of the Media-Business segment.

The economic and epidemiological situation that marked the first half of 2020 had a significant impact on the financial results of the first nine months of the year. Notably, the restrictions the Russian government introduced in the second quarter to curb the spread of coronavirus had an effect on Gazprom-Media Holding’s key business areas: television, sports broadcasting and film distribution. The business activity of the Holding also decreased in the second quarter, which had a negative impact on the television advertising market.

In the third quarter of 2020, some of the media business’ segments began a gradual recovery. Movie theaters reopened, some sporting events were held - with sports broadcasts also returning, advertisers got more active as a number of restrictive measures on businesses were lifted. These factors had a positive effect in ensuring a smooth recovery of the advertising market.

Key financial figures for July-September 2020:

  • Consolidated revenues grew by 9% and added up to 22.6 billion rubles. This growth stems from an increase in advertising revenues on the Gazprom-Media Holding’s TV channels.
  • Advertising revenues of the Media-Business segment grew by 5% to 16.6 billion rubles as a result of increased advertising revenues in the Holding’s mainstream and special-interest channels. At the same time, according to the Association of Communication Agencies of Russia (AKAR), the Russian TV advertising market decreased by 3% in the third quarter. Thus, Gazprom-Media Holding was able to show positive numbers despite the overall downturn in the country’s TV advertising market.
  • Revenues from the sale of rights to audio and video content decreased by 9% to 2.3 billion rubles. This decline can be explained by the effect the epidemiological situation had on movie theaters as well as the postponement of major film releases to a later date. At the same time, the decline in these revenues was not as significant as in the second quarter. The Holding was able to compensate for the large decline in revenues from the sale of distribution rights by increasing revenues from the distribution of paid special-interest channels by Red Media and sports channels, given that sport made a partial comeback to live television.
  • Gazprom-Media Holding finished the third quarter of 2020 with an operating profit of 1.86 billion rubles as compared to the operating loss of 695 million rubles the previous year. The Holding’s net profit added up to 1.19 billion rubles as compared to a net loss of 913 million rubles the previous year.

In this way, Gazprom-Media Holding showed positive results and growth in the third quarter of 2020 in terms of its key financial indicators. This allowed the Holding to compensate for the negative effect that the second quarter had on its nine-month results. As a result, while the TV advertising market decreased by 7% in the January-September 2020 period, according to AKAR, the advertising revenues of Gazprom-Media Holding’s assets only decreased by 4%.

Key financial figures for January-September 2020:

  • Consolidated revenues decreased by 3% and added up to 65.3 billion rubles.
  • The TV advertising market, which is one of the key sources of income for Gazprom-Media Holding, decreased by 7%, according to AKAR. At the same time, the television revenues of the Media-Business segment were higher than those of the overall TV advertising market. In the first nine months of the year, the segment’s advertising revenues decreased only by 4% and added up to 47.1 billion rubles.
  • Revenues from the sale of rights to audio and video content decreased by 8% to 9.57 billion rubles. Revenues from television broadcasting decreased by 15% to 3.65 billion rubles due to the void in sports broadcasting in the first half of 2020, especially in comparison to a busy 2019.
  • The operating profit of the Media-Business segment grew by 21% to 1.67 billion rubles, based on the results of the first nine months of 2020. This growth is due to the control over consolidated expenses management and an increase in revenues in the first and third quarters of the year.
  • The net loss for the reporting period amounted to 120 million rubles. A number of factors contributed to this result: the decrease in revenues due to the overall economic situation, the effect of restrictive measures, as well as the revaluation of foreign currency liabilities due to the sharp fluctuations in the exchange rate.

The TV channels NTV, TNT, TV-3, Friday!, as well as the studios Comedy Club Production, Good Story Media, KIT Film Studio, 1-2-3 Production put a total of 37 projects back into production in the third quarter (July-August) of 2020 as restrictive measures were partially lifted in Moscow, Moscow region and several Russian regions. As a result, Gazprom-Media Holding’s channels were able to launch new projects to kick off the television season and also show fresh episodes of the ones already popular with viewers. Thanks to this, the TV channels managed to secure high viewership numbers, which got advertisers even more interested in the Holding’s new media content.

NTV

The TV channel maintained a stable viewership share of 10.1% in the third quarter of 2020, as compared to the year’s second quarter. NTV also had the best start to the television season over the past five years. In September, NTV’s share reached 10.3%. At the end of September, the channel premiered the fourth season of the international singing show Ty Super! (You are Super!), where the contestants are children who were left without parental care. The first episode of the show got the highest numbers of any season, reaching a rating of 4.4% and a share of 12.8%.

Furthermore, the channel’s new detective series Likhach (Daredevil) was a leader among all primetime series on Russian television for two weeks. Its average share was 16.6% and the rating 4.6%. With these numbers, the project became the best series premiere since the start of the year.

The auteur program Itogi Nedeli (Weekly Summary), hosted by Irada Zeynalova, has one of the highest ratings on the channel. In the new season, the program launched with a share of 16% and a rating of 4.6%. Since then, Itogi Nedeli has become the best Sunday news and analysis program on multiple occasions and is the absolute leader in its time slot.

TNT

The viewership share of TNT channel increased to 8.8% in the third quarter of 2020, as compared to 7.8% in the second quarter. TNT is in first place on weekdays with a share of 8.9% and the weekday primetime slot (19:00-24:00) with a share of 10.7%. In September, TNT’s primetime share increased to 12.9% thanks to the many premieres the channel broadcast in the new television season. TNT released 25 premiere programs and series in the third quarter. Among them, the premiere of the new season of Olga had a viewership share of 19.6%, while its spin-off Chicha iz Olgi (Chicha from Olga) got a 12.6% share. Moreover, TNT released the adventure thriller Igra na Vyzhivanie (Survival Game) in its miniseries slot at 22:00 and the project got a 16.7% share. All the projects mentioned above were leaders in their time slots in terms of viewership share.

TNT also successfully launched new seasons of its entertainment projects. On weekdays, this lineup includes the new seasons of Gde Logika? (Where is the Logic? 13.9% share), Improvizatia (Improvisation, 13%), Studiya Soyuz (Studio Soyuz, 12.6%), and Otkritiy Mikrofon (Open Mic, 12.1%). All these programs surpassed the channel’s share 1.2 times, or more, when they aired. The new format Dvoe na Million (Two in a Million) had the highest viewership share - 15.6%, which is 1.5 times higher than the channel’s average.

The channel strengthened its weekend primetime slots with new projects and formats in the third quarter. Weekends are traditionally when TNT shows its biggest shows and comedy projects. In the third quarter, the new seasons of these popular shows also had viewership shares 1.2 times higher than the channel’s average. Among the long-time hits are Bitva Ekstrasensov (Psychic Battle, 14.1%), Tantsy. Posledniy Sezon (Dances. Last Season, 12.9%), Zhenskiy Stand Up (Women’s Stand Up, 15.4%), Stand Up (12.5%), and Odnazhdy v Rossii (Once Upon a Time in Russia, 12.1%). The channel also successfully aired new formats on the weekend, including Zoloto Gelendzhika (Gelendzhik Gold, 11.1% share), Poy Bez Pravil (Singing Without Rules, 11.8%), Sekret (Secret, 12%) and Talk (13.5%).

TV-3

The viewership share of TV-3 stayed at 4.6% in the third quarter of 2020, which makes TV-3 the seventh channel in terms of viewership among an audience aged 14-44. One of the main premieres on the channel in the third quarter was the series Agentstvo O.K.O. (Agency O.K.O.). It launched on August 24 with a share of 7.9%, which is 26% higher than the channel’s daily share. The average share of the whole Agentstvo O.K.O. season was 5.6%.

The second season of the documentary project Vernuvshiesya (Those Who Returned), made with the help of Liza Alert and representatives of other search and rescue teams, also showed good numbers. The share of the first episode was 10.3%. It aired on September 4 and made TV-3 the leader in that day’s timeslot. The average share of Vernuvzhiesya since the start of the season (until September 30) was 5.9%.

Friday!

The average viewership share of Friday! TV channel increased by 8% to 4.2% in the third quarter of 2020, as compared to the same period last year. Friday! set several records during this reporting period. It was the first time that the share of the channel’s weekly primetime audience exceeded 5% - reaching 5.3% in the 19:00-20:00 slot and 5.1% in the 20:00-21:00 slot. The channel also set a daily viewership record on August 19 when its share reached 6.8%. This was the day when Friday! launched the new season of Hell’s Kitchen. As a result, the channel was in fourth place for that day among other channels targeted at an audience aged 14-44.

Furthermore, the new seasons of the culinary show Konditer (Confectioner) wrapped up in the third quarter with a share of 5.2%, which was the best indicator in the show’s history. The channel also started showing the new season of the successful reality show Patsanky (Tomboys) and the new series Uchilki v Zakone (Teacher Bosses). Both projects had viewership shares of 6.2% in the third quarter.

2x2

The viewership share of 2x2 in the third quarter of 2020 increased by 17% to 1.05%, as compared to the second quarter. The channel premiered several projects of its own production in the new television season, which consistently got viewership shares higher than the channel’s average. For example, the first episode of Podozritelnaya Sova’s (Suspicious Owl) eighth season aired with a share of 1.5%, the second season’s premiere of Show Content - 1.8%, the fourth season’s premiere of Vremya Prohozhdenii (Travel Time 2x2) - 1.1%, and the premier of DP - 1.4%.

Match TV

The viewership share of Match TV increased by 110% to 3% in the third quarter of 2020, as compared to the second quarter. The channel’s share in August 2020 was 3.3%, which is the best result for the month of August in the past three years. The average viewing time of the channel was 51 minutes in the third quarter, which is the highest level for a third quarter in all the time that Match TV has been on the air, as well as in comparison to the average viewing times in the first and second quarters of 2020.

These results can be explained by the fact that live sport started making a return to television screens after a lengthy pause due to coronavirus-related restrictions. As such, Match TV started showing again the matches of the Russian Premier League, Champions League and Europa League, as well as the national football championships of some European countries.

* Mediascope, Russia, cities with a population of more than 100,000, time period 01.07.2020-30.09.2020, audience 14-44 for TNT, TV-3, Friday!, 2x2; audience Men 14-59 for Match TV; audience 18+ for NTV. Indicator of average share (%), rating (%).