Businessmodel of ProSiebenSat1 Media

Customer Segments

ProSiebenSat.1 Media provides a range of services that are targeted at different customer segments.

• Cable network, satellite, IPTV operators, television corporations and digital media platforms, to which the Company distributes and licenses original programming content;
• advertising agencies, commercial organisations, and brand marketers, to which the Company provides traditional television advertising, digital marketing and video marketing solutions; and
• general consumers, to which the Company provides pay-per-view and subscription media services and e-commerce products. ProSiebenSat.1 Media’s broadcast operations primarily serve customers across German-speaking Europe, notably Germany, Austria and Switzerland, with the Company’s native Germany representing its largest market. The Company’s other services are largely targeted at the US and UK markets.

Value Propositions

ProSiebenSat.1 Media provides value to its customers through the quality of its original content, its range of advertising and marketing solutions and large audience, and its broad distribution network.

Channels

ProSiebenSat.1 Media operates a website at www.ProSiebenSat1.de, where customers are able to find information on the Company’s products and services. The Company also operates video streaming and on-demand services through its www.prosieben.de and www.maxdome.de domains.

Across its core broadcast markets in German-speaking Europe, the Company operates several free-to-view television channels, including SAT.1, ProSieben, Kabel Eins, Sixx, SAT.1 Gold and ProSieben MAXX. The Company aims to have a global reach. To this end it acquired US-based multi-channel network CDS in 2015, which it merged with its own Studio71 multi-channel network.

Additionally, ProSiebenSat.1 Media operates its own international sales and distribution teams, through its dedicated sales arm SevenOne Media and SevenOne Adfactory, and operates 15 production companies across six countries. The Company also has a number of external distribution partnerships in place as a means of extending its sales reach.

Customer Relationships

ProSiebenSat.1 Media’s customers are able to access the Company’s consumer-focused products – namely its programming content and online platform – on a largely self-service basis. Customers are able to view the Company’s broadcast channels free of charge, can register for subscription services autonomously online and can manage pay-per-view services on an independent basis.

The Company’s advertising, marketing and distribution services, however, require a greater degree of personal care. ProSiebenSat.1 Media aims to provide a bespoke, personalised service to its advertising customers, with a focus on comprehensive and tailored customer consultation, as well as marketing and market research findings, and enters into long-term extended licence agreements with many of its content providers. These agreements are principally established through direct contact with ProSiebenSat.1 Media sales representatives.

ProSiebenSat.1 Media publishes a range of news content on its website, including press releases and corporate news articles, and maintains a strong social media presence through its Facebook, Twitter, Google+ and LinkedIn accounts, through which it is able to interact directly with customers and consumers.

Key Activities

ProSiebenSat.1 Media is a Germany-based media and broadcasting company. It is the parent company of the ProSiebenSat.1 Media.1 Group, which includes subsidiaries such as ProSiebenSat.1 TV Germany GmbH, SevenOne Brands GmbH, SevenOne Media GmbH, Seven One AdFactory GmbH.

ProSiebenSat.1 Media has three business segments, including the Broadcasting German-Speaking segment, the Digital and Adjacent segment, and the Content Production and Global Sales segment. The Broadcasting German-Speaking segment comprises the Company’s advertising-financed free television services – including broadcast television stations across Germany, Austria and Switzerland – functions as its core business. The Digital and Adjacent segment groups together online video streaming, online games, e-commerce, and music activities. The Content Production and Global Sales segment covers the Company’s international program production and distribution business.

Key Partners

ProSiebenSat.1 Media’s diverse portfolio of services requires that it collaborate with a broad range of partners. These partners can be divided into the following groups:

• content partners, comprising independent digital media content creators, television producers, film studios and broadcast networks;
• distribution partners, including online distribution platforms and television program distributors;
• advertising and marketing partners, comprising media agencies and marketing companies that act as intermediaries in the Company’s advertising business; and
• production partners, which collaborate with ProSiebenSat.1 Media on the creation of original content. ProSiebenSat.1 Media has partnerships with European independent content creators LeFloid, MissesVlog and Michael Buchinger, as well as long-term agreements with major US studios Walt Disney, Universal Warner Brothers, Paramount, CBS, and Fox. The Company has also recently entered into partnerships with distribution platforms Couchfunk and Zattoo, TV Spiel lm and Unitymedia.

Key Resources

ProSiebenSat.1 Media’s key resources are its original programming content, its online streaming platforms, its proprietary broadcast networks, its external distribution network, its partners – in particular its advertising and marketing partners, and its personnel.

Cost Structure

ProSiebenSat.1 Media incurs costs in relation to the production of its original programming content, the retention of its personnel, the maintenance and management of its IT infrastructure and online platforms, and the licensing of third party programming content. The Company also accrues significant marketing and advertising costs, as well as costs associated with market research activities for its advertising customers.

ProSiebenSat.1 Media employs more than 4,800 members of staff worldwide, representing costs in the form of salaries and benefits. In 2015 personnel expenses amounted to approximately €477.3 million. Additionally, the Company operates a number of sales and administrative offices across its operating regions, amounting to costs in the form of rent and utilities.

Revenue Streams

ProSiebenSat.1 Media has a variety of revenue streams, organised across its three operating divisions:

• Broadcasting German-Speaking, which generates revenue through the provision of advertising and marketing solutions, functioning as the Company’s main source of revenue;
• Digital and Adjacent, which generates revenue through the provision of electronic services such as video marketing and subscription and pay-per-view on-demand solutions, notably its Maxdome service, as well as other e-commerce operations; and
• Content Production and Global Sales, which generates revenue through the production and distribution of television content and collection of technical service fees. In 2015 ProSiebenSat.1 Media generated annual revenue of €3.26 billion, up 14% on the revenue recorded in 2014. The Company’s traditional television advertising solutions accounted for just over 60% of the Company’s total annual revenue. ProSiebenSat.1 Media’s Digital and Adjacent segment accounted for 26% of annual revenue, with remaining revenue attributed to the Company’s Content Production and Global Sales segment.