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TPS’ Lackluster Numbers Belie Strong Fundamentals

By | July 30, 2003

      TPS, the number two satellite pay-TV platform in France, added only 20,000 net new subscribers in the first half of 2003, compared to 35,000 net new subscribers for the first half of 2002. TPS now has close to 1.2 million subscribers in France.

      In the first six months of 2003, TPS had revenues of 261.8 million euros ($301 million), compared to 250 million euros ($287.4 million) in the same period of 2002.

      Yet, despite the small increase in the number of subscribers, analysts believe TPS’ recent numbers could be an indicator of better times ahead. Charles-Henri De Mortemart, a media equity analyst at Dexia Securities, told Interspace: “I viewed the TPS numbers very positively. Its operating profit [for the first half of 2003] was around 13 million euros [$14.9 million]. I was expecting 3 to 4 million euros [$3.4 to $4.6 million]. This was despite TPS’ revenues, which were a little below my expectations. So, costs were under my expectations.”

      While the platform still lags behind leader Canal Satellite in terms of subscriber numbers, there are definitely signs that TPS could be on an upward curve. At one stage last year, it looked likely TPS would have no French league football on its platform between 2004 and 2007. However, Canal’s deal to acquire all the football rights was eventually annulled by the government and a new tender scheduled for the 2004-2005 timeframe. It seems the possibility of TPS not having football on its platform is now non-existent. Until the end of 2005, it is able to carry one live match a week, a highlights show and a number of matches on pay-per-view.

      Football rights will remain a key issue until the new allocation of rights has taken place. One media analyst who requested anonymity told Interspace: “On the football side, I think it was positive for both groups that they managed to renegotiate for another year. The football rights between 2005-2008 will be an important issue in terms of the take-up rates between TPS and Canal Satellite. It is an area of uncertainty. They are lagging behind Canal Satellite and have done so over the last year. If they want to take market share, having football would be a key factor.”

      TPS will also broadcast premier league basketball for the first time beginning in October this year. It will screen one live game a week. Basketball is the second most popular sport in France, so these rights are a key gain for TPS, which now has the exclusive rights for three years.

      The other area where TPS has improved is in its movie offerings. It inked deals with Warner Brothers and Buena Vista in the first three months of this year, deals which give TPS substantial access to products of U.S. studio origin. TPS is going to launch new movie channels in the autumn, and one of them will be called TPS Home Cinema. All the movies on this channel will have bonus footage, a first for TPS.

      Analysts say the focus could reap dividends going forward. Dexia Securities’ De Mortemart said: “TPS has gained a lot of ground over the last 10 months and the offer of TPS now in films is a little better than Canal Satellite, particularly in terms of U.S. movies. TPS has a better offer now, so the main challenge is to get more subscribers.”

      –Mark Holmes

      (Contact: Virginie Halleux-Leprince, TPS, e-mail:

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