Business news TV channel Z1 shuts down
The first Czech attempt at a private TV news station has failed after the business news channel Z1 abruptly ended its broadcasts Monday. The station’s owner, the J&T finance group, said the move was forced by poor advertising revenues. Z1, which opened with ambitions to compete with the state-run 24-hour news channel, ČT 24, shuts down with a loss of around 600 million crowns.
“The main reason is that despite successful restructuring and cost-cutting that took place last year, the advertising market has not reflected the possibility to address a specific target group at a higher price than full-format TV channels and other media.”
The Czech-Slovak financial group J&T lost an estimated 600 million crowns, or over 33.6 million US dollars in the project since Z1 first started broadcasting in June, 2008.
But the station never became a strong player on the market, reaching less than 1 percent of the share. Last year, Z1 hired a new editor-in-chief, Zdeněk Šámal, who in 2005 launched the station’s direct competitor, the public service 24-hour news channel, ČT 24. Mr Šámal restructured the station, cutting the cost by more than half and letting go half of its employees.
But that wasn’t enough, and in 2010, Z1 lost around 100 million crowns, despite having managed to pull in more advertising. Jan Potůček is the editor-in-chief of digizone.cz, a Czech website focused on the media market.
“I think the decision was strongly influenced by J&T’s business activities in other areas. We have to realize there has been an economic crisis, and if the firm was doing fine, it could keep funding Z1. You cannot expect a new TV channel to make profit in the first couple of years. It could only start generating profit after some four or five years.”
Z1 went on air only a few months before the start of the global financial crises. It applied for a digital licence in 2004 but due to complaints by existing Czech commercial broadcasters, Z1 was only allowed to go ahead in 2006. By the time Z1 finally started broadcasting, the public ČT 24 news channel was too big a competitor. Analysts say another problem was that Z1 paid too much for broadcasting on the terrestrial digital platform, rather than opting for the cheaper satellite and cable.
