FAILING VIVA 2 “TO BE SPUN OFF”

“Viva is Germany’s No 1 music TV channel” according to a May 22 report from bankers Merrill Lynch, “and the company intends using its strong brand and experience to expand into other European countries”. However, the report also suggests that the company still has to deliver a solution for Viva 2, its second channel, which continues to drag down overall profits. Moreover, Merrill Lynch’s German-based media analyst Bernard Tubeileh says he believes an announcement on Viva 2 will be made in Q3 this year and could lead to the channel being “spun off or restructured”.

Viva’s core channel was expected to record a 10-11 per cent sales growth in Q1 despite difficulties in the German ad market. This growth seems all the more remarkable when set against MTV Germany’s reported 20 per cent fall in TV advertising revenues during Q1. Tubeileh says he expects Viva to launch a branded radio programme later this year in Germany. He also says Viva’s core channel activities are “highly profitable” and predicts revenues to grow from last year’s E47 million to E52 million this year and E62 million in 2002. Viva 2’s income is very sluggish in comparison, with revenues last year of just E6.17million and an expected E7 million this year, but falling next year to just E 3 million.