The target audience shares of CTC Media’s Russian TV networks were affected by overall audience fragmentation and increased competition from news broadcasts in the third quarter, causing the firm to mull changes to its output.
Announcing its latest results, CTC Media said it was evaluating a “potential transformation” of its Peretz network, making it a “more cutting edge and dynamic channel, with a focus on edgy action content.”
It also said it was considering changing its audience demographic for its female-skewing Domashny network from women aged 25-59 to women aged 25-50, with an updated programming and content policy attracting “significantly younger audiences to this channel.”
CTC Media CEO Yuliana Slashcheva said that its flagship CTC Channel, which targets an audience of young adults, experienced “strong pressure from news channels throughout the third quarter” due to the “political turbulence” from the situation in the Ukraine. Slashcheva added that there was also a shift in the type of entertainment shows that consumers wanted to watch.
“The demand is shifting from humour and sitcoms to drama and happy-ending dramedy shows. We took this trend into consideration for content production, and CTC Media came up with a series of new projects in these genres that we are expecting to launch across our channels in the coming months,” she said.
Peretz, which has traditionally focused on humour and reality TV, saw its target audience share fall year-on-year from 2.3% to 2.1%. CTC attributed this to increased competition from channels that broadcast political news on the situation in Ukraine, audience fragmentation and the “relative underperformance of certain programming.”
Domashny channel’s target audience share decreased year-on-year in Q3 from 3.9% to 3.7%, again because of fragmentation and competition from news broadcasts – though this was partially offset by changes in the programming schedule in daytime and primetime slots.
The CTC Channel maintained its place as the third most-watched broadcaster in Russia in its target demographic of 10 to 45 year old viewers. However, its target audience share was down year-on-year from 11.6% to 10.3%.
Overall, CTC Media said that it outperformed the Russian TV advertising market in both Q3 and the nine months ended September 30, 2014. However, its operating revenue grew more slowly due to “weakening content sales in Ukraine.”
Devaluation of the ruble, which lost 15% against the dollar during the third quarter and declined 17% year-on-year, also “significantly affected” CTC’s third-quarter performance.
In the quarter, operating revenues came to US$158.6 million (€124.6 million) – up 3% year-on-year in ruble terms, but down 7% in dollar terms. Net income came to US$31.6 million, down 24% in rubles and 32% year-on-year in dollar terms.
At the same time CTC Media has appointed two international firms – Morgan, Lewis & Bockius and Habif, Arogeti & Wynne – and a Russian firm, Egorov Puginsky Afanasiev & Partners, to provide legal and tax advice ahead of planned changes to Russian media law. This will reduce the permitted level of foreign ownership in Russian media firms from 50% direct ownership to 20%.
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