According to ARBOmedia and TNS A-Connect, the gross spending on TV ad grew by 14.6% y/y to CZK11.3bn in the 1H06 while the length of TV spots increased by 50% y/y to 919 hours. Gross TV ad spending decreased by 19% y/y to CZK5.56bn at TV Nova in the 1H06 while increased by 139% y/y to CZK3.9bn at the rival TV Prima. In terms of GRP points, TV Nova’s share decreased to 47.6% from 70.1% last year compared to TV Prima’s increase to 40.3% from 18.3% during the same period.
Our view: The decrease in TV Nova’s share on GRP points has been well documented and expected through the 1H06 with TV Nova’s sales falling by 27% y/y in the 1Q06. The drop is a result of changes at TV Nova in terms of strategy and sales team, which led to an initial negative reaction. The situation has been stabilizing in the recent past suggesting that TV Nova’s strategy may prove successful. IN addition, TV Nova’s rating remained constant at around 40% vs TV Prima’s 20%. CME should provide more details about the TV ad market, its strategy and sales development during a conference call to its 2Q06 results on Thursday, August 3 at 4.00pm CET. In the mean time we reiterate our Buy and are recommend overweight CME vs. TVN.