Score’s Levy says Q3 was “costly” but blazes ahead with TV, mobile

This story has been updated Score Media says it is successfully monetizing its “growing user base” across its digital platforms, but those revenue increases weren’t enough to offset development costs and soft ad sales in its core TV business. The Toronto-based media company, which owns sports specialty channel The Score and digital properties TheScore.com and […]

This story has been updated

Score Media says it is successfully monetizing its “growing user base” across its digital platforms, but those revenue increases weren’t enough to offset development costs and soft ad sales in its core TV business.

The Toronto-based media company, which owns sports specialty channel The Score and digital properties TheScore.com and the ScoreMobile app, saw third-quarter profits slip to $500,000 from $2.1 million in the corresponding year-earlier period. Revenues for the quarter were $12.7 million, down from $13.1 million for the three months ended May 31, 2011.

Score Media has invested heavily in the digital space in recent years, and was rewarded with what it termed “significant” audience growth across its digital platforms during the quarter.

Its ScoreMobile applications averaged 3.5 million unique users per month, a 46% increase – or more than 1.1 million unique users – from the year-earlier period. TheScore.com averaged 1.4 million unique users per month, up 38% (or 400,000 unique users) from Q3 2011.

Score Media’s digital initiatives included the introduction of the ScoreMobile app for the Kindle Fire tablet, and a partnership with bookmaker William Hill that enabled U.K. users of its ScoreMobile FC app to bet on live soccer matches using their iPhone, Blackberry or Windows smartphone.

The key now, however, is increasing revenue from its digital assets. Score Media’s digital revenues for the quarter were $1.1 million, up from $0.8 million in the corresponding year-earlier period, but not enough to offset $2.9 million spent developing the platforms.

However, Score Media CEO John Levy is confident the company’s short-term investment in digital will yield future dividends. “Is it costly what we’re doing? Yes. Was it planned? Yes. Are we going to continue to do it? Absolutely. But do we expect that within the next few years we’re going to start generating earnings and revenue on that side of the ledger and not have it be a drain on the revenues of the company? The answer is ‘For sure.’ The potential gains are enormous.”

Broadcast media revenues for the quarter dropped to $11.5 million from $12.3 million a year earlier, which Score Media attributed to “softness” in the television advertising market and the closure of The Score Satellite Radio.

Broadcast earnings for the quarter fell to $3.8 million from $4.5 million last year, due to revenue decreases and increased rights fees for the company’s content partnership with World Wrestling Entertainment.

Levy said quarterly results don’t tell the whole story for Score Media’s TV business, and dismissed suggestions that digital growth isn’t coming fast enough to compensate for declining TV revenues.

“Year over year, our ad revenues are going to be higher than they were last year,” he said. “We don’t see our TV business softening at all. We’re not moving into digital because we’re worried about the TV asset – we see the TV asset as continuing to grow very nicely.

“We think we’re going to be able to continue to capitalize on the type of programming we’re initiating and acquiring,” he added. “We have a very healthy television business. There are going to be some quarters that are a little lighter than others…but the bottom line is we’re very bullish on our TV network.”

Marketing initiatives such as the ongoing partnership with Gillette Canada on the reality show Gillette Drafted – which is readying its fourth season – demonstrate the company’s ability to create compelling marketing programs, said Levy.

UPDATE: This story originally reported that Gillette Drafted had concluded its fourth season. However, its fourth season is set to begin in September. Marketing regrets the error.

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