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Affiliate Monitor Catena Media Q3 review
CATENA MEDIA Q3 REVIEW
NO HIDING PLACE
For all the bravado about Catena Media ’ s growth in the North American market – up 11 % yearon-year to € 18.6m and reaching a last 12-month total of € 79.4m or 58 % of total revenues of € 32.3m – the company can ’ t disguise that it is now retreating from global market leadership .
Typical of its problems , at least as far as the European market goes , is Germany . Once a growth driver when the market was grey , the new regulated regime and the confusion caused over the status of online casino means Catena has the means to drive traffic , but effectively nowhere to send it .
On the call , chief executive Michael Daly explained the dilemma . “ I ’ ve been happy with our growth in traffic ,” he said . “ The challenge we have seen , to date , is still the number of operators and licences and the marketing spend there and also the conversions quite frankly .”
In effect , he added , Catena was sending traffic but the conversion rates “ are not very healthy from our perspective ”.
“[ The operators ) are having trouble with some of the new rules and regulations so the market has still not stabilised into a churning engine . By no means are we saying Germany won ’ t grow to be a very significant market for us someday ; it ’ s just in the next 12 months we don ’ t see that .”
In the meantime , he added , the company was “ being cautious ” and keeping its teams in place and “ working on our products ”.
THE SWITCH
In the last two years the geographic split for Catena Media has reversed , definitively it would seem , with North America now worth 58 % of total revenues and the rest of the world contributing 42 %.
As noted in the introduction , the company ’ s focus is now on its North American operations , with the only other territories even getting a look in with regard to potential investment – or a mention on the earnings call – being the UK , Italy , Japan and Latin America .
“ It is clear to Catena Media that in the next few years our largest opportunity – our highest margin opportunity – exists in North America ,” Daly told the analysts .
“ It is a market with an appetite for expansion , with a view that gambling can be a safe part of the ecosystem , and a market where Catena Media has become the strongest affiliate in the industry .
“ We see the optimal path to focus our organisation as maximising that opportunity in
58 %
North America now contributes well over half of Catena Media ’ s total revenues iGB Affiliate Monitor