2. TV update, 1-st half of 2009

3. TV Market Premises Television is the highest penetration media channel in Romania. TV campaigns allows the quickest way to build reach for all population categories. This is possible due to low costs for TV access and over 90% cable distribution in urban areas. TV audience is measured by international standards, on a minute-by-minute base, using people-meters. The existing (GFK) panel used for TV measurement is skewed towards older population when compared with the available statistics on population data.

4. Analysis premises Analysis is done by comparison Jan-June 2008 vs Jan-Jun 2009 only on commercial breaks. Data provider is GFK. The target used is the commercial target: 18-49 y.o. living in urban areas. The present study aim to obtain the most accurate data related to the ad space paid on TV. Therefore we take the following actions: –We exclude from the analysis the categories that are not paid: promo spots, CNA warning messages, non commercial spots. –We exclude from analysis political spots, teleshopping advertisement and other messages like this, that are very likely to alter the relevancy of the study.

5. Key Facts 2003-2008 GENERAL During the last 6 years a lot of new channels entered the market. The opportunity was that the biggest TV stations arrived to a situation of sold-out in the most advertised months. The result is market fragmentation. We assist to a constant drop of audience per spot aired. The drop is around 20% per year. In 2003 the average spot marks 1.57% of audience. In 2008 (whole year) the value is 0.46%. Until 2008 advertising space bought on TV raised every year by 10% and the prices went up by 20%. The result was a market increase of more than 25% every year. In 2008 the advertising space bought had the first stagnant period but the market still increased by 20% due to raise of prices.

6. Key Facts 2003-2008 Stations Battle The first four TV stations (PRO TV, ANTENA 1, ACASA TV and PRIMA TV) attract 54% from the total bought TV audience. They also deliver 60% from the total GRP’s in PT. Two TV stations manage to obtain massive increase in share of audience: REALITATEA TV and KANAL D. Between 2007 and 2008 they arrived to 11% share of audience. This means almost 100% increase.

7. Key facts 2009 GENERAL MARKET Big fishes get more food than small fishes…

8. Key facts 2009 GENERAL MARKET The commercial companies bought by 9% less GRP’s than last year. CPP shrink from the beginning of the year with more than 25%. And the process speeds up from the beginning of summer. Process is driven by the big TV stations in high need for cash. The clutter in PT is by 12% lower than in 2008. The length of the spots is by 3% shorter than in 2008. The average rating of aired spot, in commercial breaks, is 0.41% of audience. The same as the average of the period Jan-Jun 2008. The average rating of the spots aired in PT decreased by 4%. First 10 TV stations increased their average rating.

9. Key facts 2009 GENERAL MARKET The ad money in the TV market are fewer with more than 30%. There are 12% less advertisers on TV. With smaller budgets, the strategy of the advertisers is to use shorter variants of spots and to buy less PT. Advertiser are buying by 14% less PT than last year. But they are airing just by 11% less in PT. Big TV stations are more accessible (pricing) in PT and have better ratings. First four TV stations air today 63% from the total market GRP’s in PT. A 5% increase compared to last year.

10. Key facts 2009 GENERAL MARKET First ten TV stations increased their average rating per spot due to lack of programming from smaller TV stations. This process will continue and evolve. Budgets are shrinking for the small TV stations and the drop in their audience will increase further. We estimate revenue loss up to 50% for some of small TV stations. Internet Television will become an option (for small TV station) so, some of their budgets can switch to online in the next near future. This is speeding the sales of GRP’s online.

11. Key facts 2009 Stations Battle Top 10 TV stations are selling 78% from the total TV advertising space in 2009. With 2% more than in 2008. Top 10 TV stations air 5% less GRP’s in 2009. But, because of the length of the spots, the base for calculating the revenues is by 7% lower than in 2008. Some TV stations sell more GRP’s in 2009 than in 2008: stations related to Voiculescu’s group and Kanal D. This does not necessarily reflect a higher revenue, but can also mean higher decrease of CPP compared with the average downsize of the market.

12. Key Facts 2009 PRO TV Keeps best control over the GRP’s inventory. In the last 2 years they did not overpass the airtime limits in PT. This year they have almost the same inventory of GRP’s to sell as in 2008. In PT have the highest average rating from the market: 4.3%. Just 1% lower than in 2008. Keeps this value since 2007. The highest rating per spot in OPT: 2.01%. With 17% better than in 2008. Sell 24% from the total GRP’s inventory on the market. According to our calculations, this, translated into currency, means around 35% from the TV market income. Sell 15% less air time than in 2008. We estimate 27% decrease in revenue. The OPT interval of PRO TV represents the best TV station on the market after Antena 1 and Acasa TV.

13. Key Facts 2009 ACASA Have less GRP’s to sell. We estimate that total inventory will drop up to 75% compared with last year. Face the most severe decrease in rating: 33%. The decline of share is mainly on OPT intervals where ACASA is losing more than 50%. ANTENA 1 and KANAL D are the stations “eating” from ACASA market share. ACASA sell 9% from the total market GRP’s while last year their performances was 11%. Despite the massive loss in ratings, and the 9% drop of the total GRP’s bought on the market, ACASA manage to sell just with 21% less GRP’s than last year. We estimate up to 23% decrease in revenue. The decrease of the detergents buying affects ACASA directly. ACASA is becoming one of the less cluttered TV station, so, for products dedicated to women it is still an excellent choice.

14. Key Facts 2009 Antena 1 Bigger inventory stock of GRP’s than last year. Only from May they sell more than 80% of inventory of the GRP’s in PT. They have with 30% more GRP’s to sell this year. Increase the average rating point by 35% (now up to 1.8%). PT increase of 17% (now at 2.7%) and OPT increase of 55% (now at 1.4%). Sell by 2% more GRP’s in PT than last year and by 28% more in OPT. Length of the spots used decreased with 6%. Have 20% market share of the TV market income this year. Our estimations: they make 5% less money than last year. Advertisers can obtain the same number of GRP’s by 35% less spots. The clutter on Antena 1 is lower. OPT is a consistent better interval than last year. Reach of Antena 1 improve.

15. Key Facts 2009 KANAL D Have an inventory of 14% more GRP’s to sell. They sell now 21% more GRP’s than last year. They are overloaded already in PT since March. 9% increase of average rating in PT and 19% increase of average rating in OPT. As market share from the total TV dollars we estimate that KANAL D increased by 25%. It is the only station that can have increase in revenue up to 5% compared with last year. The most cluttered TV station in PT. And will be so until the end of the year. The OPT interval can be used as a small TV station offering the same coverage.

16. Key Facts 2009 PRIMA TV Have an inventory of 8% more GRP’s to sell. They sell less GRP’s with 14%. 29% increase of average rating in PT. And their PT is undersold. On the last 3 months the average loading is 77%. As market share from the total TV dollars we estimate that PRIMA TV is keeping it’s 7% share. The revenue of PRIMA TV can be by 20% less than in the same period of 2008. A TV station with great opportunities in PT. The clutter is lower.

17. 2009 summ-up OPT is becoming more important in planning. Some TV stations have now more advantages on this interval. Big TV stations increase their market share against smaller TV stations. Cost will continue dropping.

18. For further details and updates call Dan Florescu: 0722 468 880