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ANNUAL REPORT <strong>1999</strong><br />
<strong>TV</strong> 2 Norway<br />
In 1991,<strong>TV</strong> 2 received its<br />
licence to operate nationwide<br />
commercial television in Norway.<br />
The concession expires on 31<br />
December 2002, and <strong>TV</strong> 2 is<br />
currently negotiating with the<br />
authorities for the renewal<br />
of this license.<br />
<strong>TV</strong> 2 broadcast its first programmes in<br />
September 1992 and in the course of just a few<br />
years has established its position as Norway’s<br />
leading commercial television channel. In recent<br />
years, the number of <strong>TV</strong> 2 viewers has exceeded<br />
30 percent, while the company has held about<br />
2/3 of the Norwegian market share for television<br />
commercials.<br />
<strong>TV</strong> 2’s programme policy is based on the<br />
principle of public broadcasting, that is to say it<br />
must be possible to receive <strong>TV</strong> 2’s transmissions<br />
all over Norway, and the programmes are to<br />
provide a broad and varied menu and shall contribute<br />
generally towards strengthening the<br />
Norwegian language, identity and culture. <strong>TV</strong> 2<br />
aims to create a broadcasting formula that as far<br />
as possible combines consideration to sound<br />
commercial operations with a desire to provide<br />
good programmes to both broad and narrow<br />
categories of viewers. News, sports and entertainment<br />
are the three main elements in this<br />
programme mix.<br />
In <strong>1999</strong>, <strong>TV</strong> 2’s distribution increased by<br />
one percentage point to 97 percent and 3 608<br />
000 Norwegians over the age of 12 are now<br />
able to receive the programmes broadcast on<br />
this channel.<br />
<strong>1999</strong> IN BRIEF<br />
In February <strong>TV</strong> 2’s Editor-in-Chief and Managing<br />
Director Arne A. Jensen notified the Board of<br />
Directors that he had accepted an offer from<br />
the airline company Braathen to take up the<br />
position as their Group Managing Director. On<br />
11 October <strong>1999</strong>, Kåre Valebrokk took over as<br />
<strong>TV</strong> 2’s new chief executive.<br />
With the exception of <strong>TV</strong> 2, all the<br />
Nordic public broadcasting companies and<br />
established commercial channels transmitting<br />
over ground networks lost viewers over the<br />
past five years. In <strong>1999</strong>, <strong>TV</strong> 2’s market share of<br />
the national universe amounted to 31 percent, a<br />
one percent increase over 1998. NRK, the staterun<br />
broadcasting channel, lost viewers again in<br />
<strong>1999</strong> and ended with a market share of 36 percent<br />
compared to 38 percent the year before.<br />
It is with satisfaction <strong>TV</strong> 2’s management notes<br />
the same trend in the cable universe (which includes<br />
NRK, <strong>TV</strong>3, <strong>TV</strong>Norge and <strong>TV</strong> 2), where<br />
competition is fiercest. In <strong>1999</strong>,<strong>TV</strong> 2 held a market<br />
share of 25 percent in the competitive universe,<br />
a slight increase over the previous year.<br />
Seen in isolation, <strong>TV</strong> 2’s consolidated<br />
annual results were far from satisfactory. The<br />
consolidated results showed a loss of NOK 58.1<br />
million after tax. However, operating results<br />
were positive, with a profit of NOK 141.8 million.The<br />
negative result may in large be ascribed<br />
to <strong>TV</strong> 2’s share of the losses experienced by our<br />
affiliate,<strong>TV</strong>Norge, in which <strong>TV</strong> 2 has a 49.3 percent<br />
ownership interest, as well as to the payment<br />
of <strong>TV</strong> 2’s guarantee commitments undertaken<br />
when acquiring this interest in 1997.<br />
<strong>TV</strong> 2 guaranteed increased viewing figures and<br />
increased advertising revenues for <strong>TV</strong>Norge<br />
between 1998-2001. In October <strong>1999</strong>, <strong>TV</strong> 2’s<br />
board resolved to buy the company out of this<br />
agreement for NOK 335 million and NOK 30<br />
million in free advertising time. <strong>TV</strong> 2 retains its<br />
shareholdings, but responsibility for programming<br />
is transferred back to <strong>TV</strong>Norge.<br />
Operating revenues in <strong>1999</strong> amounted<br />
to NOK 1.359 billion for the Group, and NOK<br />
1.241 billion for the parent company <strong>TV</strong> 2.This<br />
corresponds to a growth in turnover of 4.1 percent<br />
for the Group and 6.8 percent for the<br />
parent company.<br />
Operating costs amounted to NOK<br />
1.217 billion for the Group and NOK 1.069 billion<br />
for the parent company.This corresponds to<br />
a growth in costs of 8.5 and 11 percent respectively.<br />
Programme costs in particular contributed<br />
towards this growth.The cost of acquiring programmes<br />
rose by about NOK 100 million from<br />
1998 to <strong>1999</strong>.<br />
<strong>TV</strong> 2 succeeded in retaining its strong position<br />
on the advertising market, with advertising<br />
and sponsorship revenues totalling NOK 1.205<br />
billion in <strong>1999</strong>. This corresponds to 64 percent<br />
of the total market for television advertising in<br />
Norway, in line with the 1998 figures. To begin<br />
with, <strong>1999</strong> was slow in the advertising business,<br />
with much less demand than in the previous<br />
year.The situation improved considerably during<br />
the autumn, but in an overall picture <strong>TV</strong> 2 did<br />
not reach its target forecasts for the year.<br />
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