TV3 blames ratings for slide in income

By KARYN SCHERER

The Canadian owners of TV3 and TV4 have made it clear they expect a better performance from the network after a dismal year in which ratings and revenue have plunged.

CanWest Global Communications revealed yesterday that revenue from its New Zealand assets, including TV3 and TV4, had dropped 13 per cent to $116 million in the year ending August, after several years of steady increases.

It also confirmed a 69 per cent drop in earnings before interest, tax, depreciation and amortisation, from $27.5 million last year to just $8.6 million.

The result contrasted with a steady performance from its Canadian and Australian networks.

While the Winnipeg-based company did not provide a bottom-line earnings figure for its New Zealand operations, it confirmed that both TV3 and TV4 were continuing to lose money in the three months to the end of August - albeit less than in those months a year earlier.

It has blamed a weak New Zealand dollar, costly local production and a tough economy for the result, but the network's New Zealand managing director, Graeme Hunter, conceded yesterday that the main cause was a ratings slump which saw TV3's revenue drop by 17 per cent.

He also conceded that TV4 had not performed as well as expected, losses from the two-year-old channel increasing to $3.9 million, from $1.3 million last year.

While TV4 was partly cannibalising TV3's audience, he insisted the company had no regrets about setting up the new channel and hoped to see it break even next year.

The only bright spot in the profit announcement was the strong performance of the More FM radio network, which CanWest bought two years ago. The network, which has stations in the four main centres, increased its revenue by 10 per cent over the year. It also boosted its operating profit by 22 per cent to $6.4 million.

Chief executive Brent Impey credited a more robust market for radio advertising for the boost, as well as strong ratings and a deliberate strategy to keep out of provincial areas.

The downturn at TV3 and TV4 has seen around 15 of the network's 280-odd staff lose their jobs in the past year, but Mr Hunter said he did not expect more redundancies.

While the company had been forced to cut local programming costs this year, he hoped to boost spending again next year.

He also pointed to gains in TV3's average audience share since July, which had seen revenue increase significantly. The increase was particularly marked in the past two months, although he was unsure whether this was a pre-election blip.

The network was confident, however, that it would get a significant boost from its deal with Sky TV to screen free-to-air rugby and rugby league.