Pro Sieben Sat.1 plans pay-TV
The debt-ridden television group Pro Sieben Sat.1 no longer wants to rely on the sale of advertising time and is therefore planning to introduce long-term subscription fees for viewers of Pro Sieben, Sat 1, and Kabel 1.
CEO Thomas Ebeling told Handelsblatt that the company needs to become more independent of the advertising market. In many small steps, the aim is to persuade viewers to pay fees to receive the channels. For the future viability of the Group, it is extremely important to build relationships with end customers, for example via pay TV, video-on-demand or other business models. The self-imposed target is to generate 30 percent of revenues outside advertising by 2014. Last year, Pro Sieben Sat.1 generated revenues of EUR 3.1 billion, but had to accept a loss of EUR 129 million. Today, growth can no longer come from the advertising market alone. All revenue streams, including end customer subscriptions and one-off payments, must be tapped, according to Niko Steinkrauß, media expert at management consultancy Booz.
No concrete price expectations
In other European countries, viewers spend 50 to 200 euros a month on pay TV. In Germany, however, it is not possible to charge anywhere near as much, said Ebeling, without naming specific prices.
The TV manager announced that he would initially venture into pay-TV with smaller special-interest channels in order to test the market reaction. This is not imminent for the major channels such as Pro Sieben or Sat.1. "We are not ready to take this big step at the moment," said Ebeling.
The advertising market in Germany will shrink by up to 15 percent this year, although a recovery is noticeable in the current quarter, he continued. For next year, he expects a development of plus 2 to minus 5 percent. In order to make the previously free-to-air channels more attractive to viewers, new business areas are to be developed. Among other things, the company plans to set up its own television production. The company already has an exclusive contract with television producer Dick de Rijk. He previously worked for Endemol and created the successful format "Deal or no Deal", among others.
No concrete price expectations
In other European countries, viewers spend 50 to 200 euros a month on pay TV. In Germany, however, it is not possible to charge anywhere near as much, said Ebeling, without naming specific prices.
The TV manager announced that he would initially venture into pay-TV with smaller special-interest channels in order to test the market reaction. This is not imminent for the major channels such as Pro Sieben or Sat.1. "We are not ready to take this big step at the moment," said Ebeling.
The advertising market in Germany will shrink by up to 15 percent this year, although a recovery is noticeable in the current quarter, he continued. For next year, he expects a development of plus 2 to minus 5 percent. In order to make the previously free-to-air channels more attractive to viewers, new business areas are to be developed. Among other things, the company plans to set up its own television production. The company already has an exclusive contract with television producer Dick de Rijk. He previously worked for Endemol and created the successful format "Deal or no Deal", among others.
