On March 25, Gazprombank published its financial results for the period of January-December 2018 in accordance with the International Financial Reporting Standards (IFRS). The report listed the key numbers from the Media-Business segment.
The consolidated revenues of the Media-Business segment, which includes Gazprom-Media Holding, grew by 10.5% in 2018 as compared to 2017 to reach 95.488 million rubles. Advertising revenues in the Media-Business segment grew by 12% to 73.206 million rubles. Meanwhile, the Russian television advertising market as a whole grew by 9%, according to the Association of Russian Communication Agencies (ACAR).
The advertising revenues of the Media-Business segment grew due to an increase in ad sales on the mainstream and special-interest channels of the Holding.
At the end of 2018, the Media-Business segment had an operating profit of 1.257 million rubles thanks to the growth of consolidated revenues and control over the growth of consolidated expenses.
Thanks to the growth of consolidated revenue, the Media-Business segment of Gazprombank wrapped up 2018 with a net profit of 2.220 million rubles, as compared to a net loss of 3.470 million rubles the previous year. The Holding also reduced financial expenses related to debt servicing in 2018, implemented measures to reduce dependence on foreign currency, and transferred several contracts into rubles. An increase in dividends from shareholders also had a positive impact on financial indicators. Gazprom-Media’s television business made the biggest contribution to the net profit of the Holding.
“By the end of 2018, we increased revenues by 10.5% and received a net profit of 2.2 billion rubles. Advertising revenues still make up the main part of our revenues. At the same time, we continued to work on new ways to monetize content. One cannot ignore the success of Gazprom-Media on the market of film and TV series production and distribution. We have significantly increased the sales geography, and our TV products are represented on the world’s largest streaming services. As a result, revenues from the sales of rights increased by 31.5%,” said Dmitry Chernyshenko, CEO of Gazprom-Media Holding.
“By strengthening our leadership in the production of popular video content, we are increasing our presence in the digital environment. Our premium platform, TNT-PREMIER, is showing steady growth since it was launched, while the TV series that were released on the platform have become hits with a mass audience. I would also like to emphasise that the sports business of the Holding achieved net profit in 2018 ahead of schedule,” Dmitry Chernyshenko added.
Non-advertising revenues of the Media-Business segment
The sale of media rights and distribution of media content accounted for the main share of the Media-Business segment’s non-advertising revenues. Revenues from the sale of media rights grew by 31.5% to 11.700 million rubles in 2018 thanks to an increase in revenues from the distribution of Red Media’s special-interest channels, Gazprom-Media Match sports channels, as well as Central Partnership’s film distribution.
Moreover, the sale of rights increased due to the successful monetization of NTV projects in the digital environment in Russia and abroad. NTV series alone got more than 500 million views on YouTube and ivi.ru. Three NTV series were also presented on the world’s largest streaming services: Hozdenie po Mukam (The Road to Calvary) on Netflix, Apperkot dlya Gitlera (Uppercut to Hitler) on Amazon Prime, and Schubert on China’s Bilibili. These resources have millions of subscribers, which now got access to NTV’s media content.
The successful distribution of the Gogol trilogy, which earned more than 1.3 billion rubles at the box office, also helped to increase rights sales.
Gazprom-Media is also successfully working on the distribution of its own content in the digital environment based on a paid model. The Holding launched a premium football channel, Match Premier, in 2018. The number of the channel’s subscribers increased by 40% in the first half of its debut year.
TNT-PREMIER’s OTT-platform was launched in August 2018. Among the most popular premieres of the service are such TV series as Domashny Arest (House Arrest), Zvonite DiCaprio! (Call DiCaprio!), God Kultury (Year of Culture) and Mertvoe Ozero (The Dead Lake). The content presented on the OTT-platform has received more than 108 million views, with viewership of premiere content accounting for 63% of the total. As of today, the app had been installed 3.6 million times.