Kabel Deutschland reports ‘soft’ premium TV demand

Kabel Deutschland reported a decline in TV business revenues and said there was “soft” demand for premium TV after it stopped encrypting a number of basic SD channels in April. 

Announcing its fiscal first quarter earnings, the operator, which is in the process of being bought by Vodafone for €7.7 billion, said the unencryption of digital SD channels by private broadcasters ProSiebenSat.1 and RTL reduced customer demand for digital entry products and lowered the to Premium TV products with 17% fewer gross adds compared to a year ago.

In Premium TV, Kabel Deutschland recorded 24,000 net additions for the three months ending June 30, compared to the previous quarter. However, the firm said it impacted by “extraordinary churn” of 32,000 Kabel BW pay TV wholesale customers.

In total Kabel Deutschland reported 2.094 million premium TV customers, up 17.5% year-on-year. Total blended TV revenue per subscriber also increased 4.5% year-on-year to €10.66 and Kabel Deutschland was upbeat about its future TV prospects.

“Measures to further stimulate demand and increase sales are being implemented and given low product penetration and pent-up demand for HD and DVRs, Kabel Deutschland’s general positive outlook on Premium TV remains unchanged,” it said.

However, TV Business revenues declined by 1.4% to €290 million year on year, which it attributed to public broadcasters’ carriage fees no longer being accounted for.

In total the Kabel Deutschland’s revenues increased by 4.6% year-on-year to €464 million. Net profit was down 55.5% to €29.3 million but adjusted EBITDA was up 3.8% to €217 million.