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Netplay issue profits warning
Television is always a risky business as results can go either way, both with advertising and with programmes, and it seems that the gamble has not worked out for NetPlay TV. They have just issued a profits warning after seeing lower than expected revenue from the initial run of their ITV Bingo Stars programme.
NetPlay TV have Challenge Jackpot and Bingo Stars on ITV, STV and Virgin 1. Bingo Stars was launched on 27th May and a new way of playing the game, which is a type of quick play keno, by mobile phone was recently introduced.
The company admitted that the take-up of the mobile gaming product was lower than expected. They said; ” It is becoming clear that we need to be very flexible in our product outputs and, on 21 June, we altered our format and scheduling to trial an alternative format in our earlier segment. This product is a more akin to our proven interactive gaming formats. We have gained a vast amount of knowledge from our current successful and profitable media partnerships and we are using this knowledge to the full, both in terms of potential cost savings and customer playing habits. Early signs are more encouraging with customers depositing funds during the show as well as to the website the following day.”
The company did warn however that revenues would take longer to collect because players would lose money over a greater time period; “The move from an instant play model to a more traditional game play, as well as increased first half costs, will have a material impact on our short term profit performance. As a result the Directors believe this will have a significant impact on the full year market expectations. The initial costs associated with producing and trialling new gaming formats are high, although as we amend the model to be more inline with our proven formats we are able to reduce costs significantly with immediate effect. The focus on developing new formats, moving technical platforms, migration offshore and improving our core offerings has been a major upheaval for the business; as a result costs have increased substantially in the short term. In altering the current format and scheduling as well driving more synergies between our brands we
are able to strip costs out from the business with immediate effect, thus protecting cash and the Company’s balance sheet.
NetPlay TV has several online Internet bingo, including Bingos.co.uk, Bingos.com, El Bingo and Bingo Friends.
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