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WHITEREPORT FINANCIAL FLASH REPORT, 2015
TRENDS IN THE REVENUES AND PROFITS OF THE TOP 100 HUNGARIAN MEDIA
COMPANIES
BASED...
Intro
The Whitereport.hu mediabrowser (WR) is the ultimate cross-media industry tool,
which provides easy access to commer...
Executive summary
Based on facts provided by the Whitereport.hu media browser
 In 2015, the top 100 media companies – Hun...
On the methodology of the flash report
The first WR Financial Flash Report was released in 2013.
Carried out by May 2016, ...
The 2015 flash report of the Whitereport.hu media browser
 Slight increase in revenues across the market: the 2015/14 WR ...
 The dynamics behind the WR Index of 101: a few companies’ large drop was
offset by small growths at many other companies...
o In 2015 the 10 media companies realizing the greatest degree of
increase in their revenues produced a total growth of HU...
 Data by segment
o The 100 media companies with top revenues include 55 print and online
media outlets, 16 television com...
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Whitereport financial report_2015_160710v_eng

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The innovative cross-media data base, Whitereport mediabrowser presents a summary of the market size and profitability of the Hungarian media market.
Whitereport mediabrowser is the ultimate cross-media tool for the media industry.
The mediabrowser that was selected as one of the most innovative data startups in 2016 by the American Collision Startup Conference and one of the most promosing startup by Pioneers Vienna.

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Whitereport financial report_2015_160710v_eng

  1. 1. WHITEREPORT FINANCIAL FLASH REPORT, 2015 TRENDS IN THE REVENUES AND PROFITS OF THE TOP 100 HUNGARIAN MEDIA COMPANIES BASED ON THE LATEST FIGURES BUDAPEST, 11 JULY, 2016
  2. 2. Intro The Whitereport.hu mediabrowser (WR) is the ultimate cross-media industry tool, which provides easy access to commercial, financial and ownership data of the fragmented cross-media market, typically garnered from public sources. The media browser facilitates searches across the data of over 11,000 Hungarian content sources – TV and radio stations, print and online media, cinemas and outdoor media –, using such criteria as location (2900 towns), theme (1000+), media provider (6700+), financial data, etc. Our flash report summarizes the main indicators of the top 100 media companies in a market where there are 1150 media providers. Using the latest, 2015 figures, the report is useful for decision makers at businesses and authorities. The Whitereport media browser was named one of the most promising innovations in Data Track at the New Orleans Collision conference for start-ups, while the Viennese Pioneers elected it among the top 500 most promising start-ups: these acknowledgements have opened the way for us to enter the international market. Please feel free to approach us with any questions and queries.
  3. 3. Executive summary Based on facts provided by the Whitereport.hu media browser  In 2015, the top 100 media companies – Hungary-based businesses running television and radio stations, print and online media outlets, cinemas and outdoor media – together earned net revenues worth almost HUF 256 billion (with distribution, advertising, etc. combined).  The total growth dropped to a near-stagnation level in 2015, with the WR Index being 101, which indicates a growth of 1 per cent.  The WR Index of 101 derives from the considerable revenue drop of a few large media companies (with typically non-market/non- professional owners) and the slight revenue increase of a great many (56) other media companies.  In 2015, it took net annual revenues worth at least HUF 275 million to become a top 100 company (whereas this figure was HUF 271 million in 2014).  Over 200 new Hungarian-language content services (periodicals, sites, TV and radio channels) were launched in 2015.  Two of the newly launched media companies managed to earn considerably more than the top 100 threshold.  29 of the top 100 media companies were showing a deficit in 2015 (based on operating profits), which is better than the situation after the crisis, but worse than in 2014.  Alongside a slight increase in total revenues, the combined operating profits of the top 100 media companies decreased: in 2015 the total operating profit of the top 100 media companies was HUF 3 billion less than in 2014.  With 28 of the top 100 media companies providing publicly available data on advertising tax, the Whitereport media browser found a total of HUF 2 billion payable in advertising tax in 2015.
  4. 4. On the methodology of the flash report The first WR Financial Flash Report was released in 2013. Carried out by May 2016, the processing of the latest publicly available data (those of 2015) allows us to trace the development of the main financial indicators of the top 100 best earning media companies between 2014 and 2015. Data over the past few years show that the combined revenues of the top 100 media companies accounted for more than 90 per cent of the entire market, which comprises more than 1000 companies. This report uses data available by 7 July, 2016. The top 100 media companies do not include the operators of public media, and HBO Holding Inc. (as much of their revenues come from exports). Data were unavailable for Viasat Hungária Szolgáltató Inc. and a few smaller companies, in whose case we used last year’s data to be able to perform the comparison. Several of the concerns underwent internal reorganizations, so we performed the comparison against the top 100 media companies of 2015. The media companies’ complete revenues include all revenues from distribution and/or advertising and/or other activities. The Flash Report does not concern itself with the structure of the media companies’ revenues. If you are interested in single and aggregate data for individual companies, or want to learn more about changes in ownership and portfolios, consider subscribing to the Whitereport.hu mediabrowser, or request a customized Excel spreadsheet. According to the Whitereport.hu media browser and data from across all media in the Hungarian market, in 2015 more than 11,000 classic media (TV and radio channels, print periodicals, websites, cinemas, outdoor media) were maintained by 6,700 organizations (companies, local governments, foundations, churches, etc.). Of these, 1,150 can be considered media companies, of which the first 100 with the greatest revenues are responsible for more than 90 per cent of the total revenues of the entire media market.
  5. 5. The 2015 flash report of the Whitereport.hu media browser  Slight increase in revenues across the market: the 2015/14 WR Index is 101 o According to the data of the Whitereport.hu media browser, the combined 2015 revenues of the top 100 media companies were almost HUF 256 billion (w/o VAT), including all revenues from distribution, advertising and other activities.1 This represents a 1 per cent increase against the previous year’s roughly HUF 253 billion, which gives a WR Index of 101. Total revenues and changes therein (WR Index) in the case of the top 100 media companies o In 2015 the growth was HUF 3 billion (+VAT), which is considerably less than the HUF 9 billion growth between 2013 and 2014. o The 2015 list of the top earning media companies changed considerably against the previous year—see the next figure. Change in annual net revenues between 2014 and 2015 for 2015’s top 100 media companies 1 Viasat Hungária Szolgáltató Zrt., Palóc Média Kft. and Erzsébetvárosi Média Nonprofit Kft. had not submitted their 2015 reports by the time the Preliminary Report was made, so we used their 2014 data for 2015. 252,7 255,7 0 50 100 150 200 250 300 2014 2015 Total annul net revenues among the top100 media companies, HUF billion. Source: Whitereport media browser 0 10 000 000 20 000 000 30 000 000 Top list of media companies by 2015 revenues (distribution, advertising and other combined), in HUF 1000 Source: Whitereport.hu media browser 2014 2015 WR Index: 101 →
  6. 6.  The dynamics behind the WR Index of 101: a few companies’ large drop was offset by small growths at many other companies o The average 1 per cent growth in revenues does not spread evenly across the top 100 companies: figures vary from -50 per cent to +110 per cent. The small growth at two thirds of the media companies slightly compensated for the revenue drop of the remaining one third. Changes in the top 100 media companies’ revenues, by number of companies (2015: no fresh data for 3 companies) 2 o The 10 media companies suffering the greatest drop in revenues lost a total of HUF 11 billion in a year; most of them have non-market/non- professional owners. The 10 media companies suffering the greatest loss of revenues Media company Annual net revenues, in HUF 1000 Source: Whitereport media browser 2014 2015 Decrease, in per cent Publimont Hirdetésszervező Kft. 8,280,570 4,081,079 -51% Media Service Zawada Kiadó és Szolgáltató Kft. 993,360 497,511 -50% HírTV Műsorszolgáltató és Hirdetésszervező Zrt. 7,089,832 4,035,073 -43% EURO-AWK Budapest Reklámszervező Kft. 839,088 482,620 -42% Lánchíd Rádió Műsorszolgáltató Kft. 477,074 282,157 -41% MTG Metro Gratis Kft.3 3,079,806 1,874,594 -39% Euro Publicity Kereskedelmi és Szolgáltató Kft. 558,174 370,636 -34% Mahír Cityposter Kft. 1,139,120 759,174 -33% Hungaroplakát Reklám Kft. 1,503,432 1,047,904 -30% Nemzet Lap- és Könyvkiadó Kft. 3,137,211 2,225,301 -29% 2 No fresh data were available for 3 media companies in 2015, so we compared changes across 97 companies. 3 Formerly released by MTG Metro Gratis Kft., the publication of the free daily Metropol ended in June 2016. 60 56 1 3 36 38 0% 20% 40% 60% 80% 100% 2014 2015 Decreasing (WR-index < 100) Stagnating (WR-index=100) Growing (WR-index>100) Number of companies per group of revenue change among the top 100 media companies according to the Whitereport media browser
  7. 7. o In 2015 the 10 media companies realizing the greatest degree of increase in their revenues produced a total growth of HUF 10 billion against the previous year, with two of them being responsible for 70 per cent of the increase (though reorganizations also account for much of this). Levels of growth vary greatly among the remaining 46 growing companies, as do the individual causes, which include organic growth, reorganizations and acquisitions. The 10 media companies realizing the greatest increase in revenues Media company Annual net revenues, in HUF 1000 Source: Whitereport media browser 2014 2015 Growth, in per cent Fidelio Media Szolgáltató és Kereskedelmi Kft. 194,190 414,263 +113% Mediaworks Magazines Kiadó Kft. (Julius Magazines Kft.) 446,110 855,079 +92% Blikk Kft. 3,759,405 5,647,119 +50% Magyar Hírlap Kiadói Kft. 417,873 620,755 +49% POS Services Kft. 1,237,535 1,722,713 +39% GYőr+Média Zrt. 215,537 290,134 +35% Discovery Hungary Média Szolgáltató Kft. 337,943 454,214 +34% Digital Media and Communications Zrt. 2,128,129 2,809,483 +32% Zova '01 Szolgáltató Kft. 220,961 281,372 +27% Magyar RTL Televízió Zrt. 21,591,614 27,346,437 +27%  Moves in the media market: acquisitions, reorganizations, new entrants – HUF 275 million in revenues to qualify for the top 100 o Thanks to acquisitions and reorganizations, the selection of companies to be analysed changed for 2015 (an examination of which is outside the scope of this flash report). o According to the data of the Whitereport media browser, over 200 new Hungarian-language content services were launched in 2015. There were 126 new print periodicals (e.g. 99 plusz egy vicc extra, Bors Extra, Business Next, Lokál, Áfa módszertani szemle, Fitt Veszprém), 98 new online content providers (e.g. Ripost, Faktor, Tenyek, Wmn, Mukorommagazin), 14 new television channels (only the Hungarian-language ones), from M4 Sport to local channels, and 4 new radio-based media services. o In 2015 in took revenues worth at least HUF 275 million to qualify for a position on the top 100 list, a slight increase against the 2014 threshold of HUF 271 million. o Media companies launched in 2015 are also on the list of top 100 revenues, such as Modern Media Group Zrt., which publishes Lokál, and Ripost Média Kft. o With total revenues worth HUF 27 billion, the largest media company, M-RTL Zrt. made 100 times as much as the last company on the top 100 list.
  8. 8.  Data by segment o The 100 media companies with top revenues include 55 print and online media outlets, 16 television companies, 11 outdoor media companies, 9 online media companies, 5 radio and 4 cinema companies. o The top 10 companies include television, newspaper publishing and cinema companies. The largest online media provider could only reach the 15th position, and revenues under HUF 5 billion could only qualify a company for the middle of the range (what is more, most of them are micro enterprises).  The challenges of 2015: changes in regulations and decreasing profitability o In 2015 there were several external factors to affect the media market (whose effect we will not discuss here). Following the advertising tax, which was introduced in 2014 and modified in 2015, advertising and media market actors faced a new challenge in 2015 with the introduction of the “bonus act”4; the result was a restructuring of the advertiser–media company–sales house–media provider value chain. o The number of loss-making media companies is still significant: while in 2013 31 of the top 100 companies had negative operating profits (and post-tax earnings showed similar ratios), there were 22 loss-making media companies in the top 100 in 2013, and 29 in 2015. o According to the data of the Whitereport media browser, the total operating profits of the top 100 media companies with the largest revenues in 2015 decreased by over HUF 3 billion against 2014 data. o The decrease of profitability could be predicted in the light of the advertising tax, but the latter’s effect on each company is highly individual, because the proportions of revenues vary widely—the distribution revenues of television, print media and cinema companies are often more significant than their advertising revenues. In other words, the advertising tax had the most adverse effect on segments based on advertising revenues: national terrestrial commercial televisions, domestic online content providers, radios and outdoor advertising companies. o The Whitereport media browser could aggregate public data on the advertising tax payable in 2015 in the case of 28 of the top 100 media companies, and the result is roughly HUF 2 billion. o While it did not necessarily follow from the changes in regulations, it is a fact that, according to the Whitereport media browser, the proportion of sales house revenues grew by 9 per cent in 2015, though this still accounted for the smaller part of advertising spendings. Do you have a question? Would you like to learn more? Contact us: Kinga Incze, CEO, founder – kincze@mrswhite.hu Timea Nagy, director of research – timea.nagy@whitereport.hu 4 http://www.kozlonyok.hu/nkonline/MKPDF/hiteles/MK15084.pdf, Act LXXII, Articles 50–53, 18 June, 2015.

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