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Telefónica claims success for originals strategy as TV base grows

Telefónica has claimed success for its original content strategy in its full-year results, with strong growth of its TV platform in Spain and a ratings success for flagship drama series La Peste.

Telefónica’s video revenues grew by 7% in the fourth quarter of 2017 and by 5.8% for the full year on the back of a 14% growth in its IPTV base and its investment in content, the company said. Video ARPU grew by 8% across all market while churn fell marginally.

Telefónica’s global pay TV base grew by 2% over the course of 2017 to 8.468 million, boosted by the addition of 92,000 customers in the fourth quarter compared with a net loss of 108,000 in the fourth quarter of 2016.

The company said that its commitment to TV as a differentiator had resulted in continuous improvement to its Movistar Play offering.

In Spain, Telefónica added 400,000 new customers over the course of the year, with growing take-up of its bundled offering Movistar Fusión. The company said that it had 4.4 million Fusión customers at the end of the year, with 87% penetration of its TV base. Conversely, some 76% of Fusión customers took TV as part of their bundle, up from 68% last year.

Overall, Telefónica’s Spanish TV base stood at 3.8 million at the end of the year, up 5% year-on-year, having added 81,000 customers in the fourth quarter. The TV number was boosted by the presence of TV in all bundled offerings. According to the company, its decision to invest in original productions such as flagship drama La Peste “yielded very positive results”. It said that La Peste, largely viewed on-demand, registered the largest audience of any series broadcast by Movistar+ to date.

Elsewhere in Telefónica’s global footprint the picture was mixed. In Brazil, where the company is focusing on IPTV rather than satellite, its pay TV base declined by 7% but TV ARPU grew by 6.1%. in Spanish-speaking America, the TV base grew by 4%, with net gains of 41,000 in the fourth quarter boosting the annual total of 113,000 net additions, driven by strong uptake in Peru. Pay TV revenues grew by 12.8%.

Overall, Telefónica posted revenues of €52 billion for the year, up 3.4%. operating income before depreciation and amortisation increased by 5.3% on a like-for-like basis to €16.2 billion.