Current TV: Ad Revenue Drops At Al Gore’s Network; Losses Widen En Route To IPO
Not the trend you want to be showing as you work towards an IPO: In its Q1 ended March 31, Current TV had ad revenue of just $2.5 million, a decline from $2.64 million in the year-ago quarter, according to an amended S-1 filing. Total revenue for the quarter was up 23 percent, helped by growth in distribution revenue. Ultimately though, the Al Gore-backed cable network needs to show improvement on the ad side. It even identifies this as a key issue going forward: “We generated approximately 16% and 15% of our revenue in 2007 and in the three months ended March 31, 2008, respectively, from advertising fees, and our business model contemplates that over the longer term the majority of our revenue growth will be derived from advertising.”
Meanwhile, though revenues grew overall, losses expanded in the quarter. Net loss came to $7.5 million compared to $2.9 million a year ago. Across the board in sales and marketing, production and general and administrative, costs were up big year over year.
The filing doesn’t specifically say what led to the drop in ad revenue, but it does hint at some operational issues. Among them: A young advertising sales team that’s having a hard time selling its inventory to wary advertisers. It also mentions some issues relating to user-gen media and user-gen ads, but ultimately the name of the game is viewership: “Historically, new television networks have received negligible ratings in the first several years in which they are rated. If we become rated and receive negligible ratings, advertisers may be less interested in sponsoring our content or paying rates consistent with our expectations, and our business, operating results and financial condition could be adversely affected.”
As for the balance sheet, it has cash on hand of just $6.1 million and debt of around $41 million; that’s up from $36 million at the end of last year. It looks as though its debt will have to expand to continue financing operations at this rate. In this market, this could be a tough IPO to pull off.
Related StoriesPosted In: Media & Publishing, TV, Cable & Telecom, Money, Earnings, IPO, al gore, current tv
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Comments (4)
May 21, 2008 12:44 PM
This is why you do not let liberal pinheads run the country. Too bad Mr.Gore can’t just raise taxes to pay for his failing TV station.
May 22, 2008 2:47 AM
This business model is flawed in that in depends stealing content from unwitting content producers, forcing them to sign away rights for less than minimum wage on the work that goes into these stories. And it’s not the just the ad staff that’s over their heads. The production and legal staff members don’t have the production skills to produce their way out of a room with an open door. All this and the nauseating army ads, trying to convince the target audience to become real targets. Any moron interested in investing in this folly deserves the pathetic organization that they’ll be buying into.
Jul 7, 2008 3:48 PM
Current TV could have worked in the 90’s, but I doubt it will fly today.
Video tech was fairly cheap in the 90’s and broadband internet hadn’t as broad a reach as it enjoys today. Folks might have tuned in to see viewer created content then. However, in today’s world of Youtube, why would anyone suffer through several annoying segments, commercials, and hosts just to catch one interesting video when they can go to Youtube and immediately watch what they want.
Jul 7, 2008 3:49 PM
Current TV could have worked in the 90’s, but I doubt it will fly today.
Video tech was fairly cheap in the 90’s and broadband internet hadn’t as broad a reach as it enjoys today. Folks might have tuned in to see viewer created content then. However, in today’s world of Youtube, why would anyone suffer through several annoying segments, commercials, and hosts just to catch one interesting video when they can go to Youtube and immediately watch what they want?