The overall TV viewership in Czech Republic dropped by 5% y/y in 2006 and by 12% y/y in 2007, which is one of the fastest rates of viewership decline in Europe, according to OMD Media consultancy. OMD Media study says that the drop is attributable to new kinds of entertainment (internet), more affluent life style, and general dullness of TV program.
Our view:
The acceleration in 2006 viewership decline is attributable to very good weather last year, encouraging more outdoor activities, rather than any other factor. The long term trend for declining TV viewership, along with flat readership of the press, is consistent with migration of advertising budgets to new media, which is factored in our valuation models for the media stocks. Within near-term horizon, we view the news as neutral for the trading on the stock.