Ed Barton & Tim Westcott, senior analysts at TBI sibling Omdia explore what the recent half-year results tell us about Covid-19’s impact on programming spend and provide their take on the global impact of Disney’s decision earlier this year to close its UK kids channels.
In many cases, lower programming costs contributed to better profitability, and the tone of some calls was relatively upbeat. However, with revenues hit and productions interrupted, it may be that worse is to come.
WarnerMedia reported programming spend of $700m for its Turner division in the second quarter, a 54% drop compared to the same period of 2019.
HBO’s investment of $715m in the quarter was actually 18% more than in 2019, as the pay TV group fuelled the launch of its HBO Max service with original programming.
NBCUniversal’s cable networks division reported a 31% drop in programming spend, while European operator Sky reported a 31% decline (in US dollars).
NBCU cited delays or cancellations of sporting events as the main reason for the drop, offsetting a slight increase in spending on other programming types. While many European sports leagues restarted in May and June, most costs will be deferred to future periods.
Lower programming expenses for Walt Disney Co were attributed to production shutdowns and the sports hiatus, but also changes in accounting. Costs for Star India were reduced by the postponement of India Premier League cricket, while fellows US heavyweight ViacomCBS said that Covid-related costs savings would come back as film and TV productions and live sports restart.
ITV, the leading commercial broadcaster in the UK and owner of a big production business in the form of ITV Studios, reported a 21% year-on-year decline in advertising revenues in the first six months of 2020 and a 17% revenue drop for ITVS.