Piracy leads Premiere to third quarter loss

November 13, 2008

Costs that can be directly attributed to the hacking of its encryption system took Premiere to its fourth consecutive quarterly loss in the third quarter. A negative EBITDA (earnings before interest, taxes, depreciation and amortization) of €27.2 million in Q3 2008 compared to the positive €22m in Q3 2007.

Higher expenses on transmission, hardware and sales pushed operating costs up to €271.8m, from €225.5m 12 months earlier, as the German pay-TV platform switched encryption to a combination of Nagra and NDS systems. Earlier this week Premiere announced that its encryption system was again fully secure.

Premiere has agreed a waiver of an upcoming debt covenant breach with its bank syndicate and is continuing to discuss changes in its debt facilities.

Under Premiere’s revised subscriber accounting method, which has reduced overall subscriber levels to the benefit of average subscriber revenues, Premiere had 2.411 million subs at the end of Q3. ARPU (Average Revenue Per Unit) stood at €23.92.

Ahead Premiere’s Christmas line-up sees the return of special agent Jack Bauer in the new series of 24, which will be screened directly after its US transmission. Movies include German TV Premieres of Shrek the Third and Harry Potter and the Order of the Phoenix.