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Changes in Alpha TV are symptomatic for the Greek TV market

04 January 2012 / 14:01:33  GRReporter
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The German media giant RTL has started a gradual withdrawal from Alpha TV. The media group will accelerate the process during the first half of 2012, and it may withdraw its entire investment if the economic situation in Greece continues to be so negative. According to sources, RTL has already reached an agreement to transfer its shares to the other major shareholder in Alpha Dimitris Kondominas, who is also the former owner of the television. At the moment he holds 30 percent of the company shares. The agreement between the businessman and the German media group is expected to be announced in mid-January. So far the TV has not provided any information about the rumours and replies with a laconic "everything new will be issued in an official press-release."

The contract provides that Dimitris Kondominas, who is now chairman of the board of the company, will take over the majority stake. He is also owner of the regional TV Channel 9, which is being broadcasted in the region of Attica.

RTL will continue to run the television until the end of the first half of the year. Until then, the media group will complete the preparation of full withdrawal from the Greek broadcaster market. The German giant partially changed its investment plan one year after its arrival in Greece by reselling Radio Alpha, which was purchased earlier as part of Alpha Media Group, back to Dimitris Kondominas. During the same period advertising in the radio station had sharply decreased, although the crisis had not yet seriously affected the Greek economy.

RTL bought Alpha Media Group and together with it Alpha television for the amount of 125.7 million Euros. At the time of sale the obligations of the company amounted to 244.5 million Euros keeping in mind that the television market size was about 550 million Euros. A year later, managed by the German media group, Alpha television reported liabilities amounting to 352.94 million Euros.

According to the latest published balance sheet of the company, which presents indicators for 2010, the television has liabilities amounting to 357.4 million Euros. According to sources, in 2011 the problem deepened due to the fact that the crisis caused contraction of the advertising market and a decline in sales for all televisions. Today the market for television channels, which broadcast throughout the country, is estimated at 350 million Euros. According to Media Services Agency advertising expenses in all national Greek TV stations had fallen by 32.3 per cent within three years. For the same period, between 2008 and 2010, the losses of Alpha TV are 34.9 percent. In 2008, the television had about 138 million Euros from advertising revenue. Two years later the same amount decreased to a little more than 89 million Euros.

Among the four largest TV stations in the country, Star TV reported the most robust losses - in the range of 43.4 percent. Mega follows with a decline of 35.3 percent, while the least affected is Antenna TV with 10 percent. However, data are calculated based on estimated advertising revenue. Assessment of the market indicates decline of up to 50 percent. Alpha TV ended up in third place for viewer ratings and advertising revenues, also due in part to the withdrawal of Alter TV from the market in the last quarter of last year.

Despite the decrease in television stations, however, there are no positive income changes expected, at least in 2012. The only thing TV stations can do is to limit their amount of losses. It is exactly this information that promoted RTL's decision to withdraw from the Greek market.

According to some commentators the medium-term outlook for the next 3-4 years can still be positive, and this despite the negative estimates for 2012 because a fundamental change in the situation is expected, as is an optimization of the television environment and substantial changes in the institutional framework for the operation of the televisions, which will pave the way for joint action in various activities, while the game will be joined by digital TV, analysts suggest.

The change in management will bring a corresponding change in the direction of Alpha television. When RTL took over the TV station in 2008 it decided to bet on entertainment programs, and therefore resorted to the necessary changes. Journalism programmes, which in the past were successful, were removed and replaced with more reality shows and celebrity news shows. It seems that if the contract with Dimitris Kondominas is concluded, the new Alpha TV will go back again to journalistic and informational productions. Initial estimates of the market show that the outcome will be positive, since a large TV will return back to Greek hands. "Even the induction of a new, more positive mood may contribute to some change in the atmosphere, without expecting miracles, of course," said Marketing Week magazine, which is a representative of the media market and closely follows developments in television Alpha.

Tags: Greece television Alpha TV RTL German
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