Digital & Adjacent Segment
Ventures & Commerce
The e-commerce business is the biggest growth driver in the Group and is thus making a material contribution to the expansion of digital revenue sources.
- Entry into high-growth business areas: We have gained access to a dynamically growing markets in recent years via our Ventures & Commerce business. Global e-commerce revenues are forecast to double from around USD 1.7 trillion in 2015 to USD 3.6 trillion in 2019. The largest European e-commerce markets are Great Britain, Germany, and France with a 61 % share in total revenues. In recent years, ProSiebenSat.1 Group has built up a successful e-commerce portfolio, whose growth it promotes through the strategic link-up with the TV business. TV spots are often a spur to perform an Internet search. This particularly benefits brands with their own Internet sales presence. For this reason, Internet firms invest a large part of their advertising budgets in TV advertising. ProSiebenSat.1 Group reaches around 42 million TV households in Germany, Austria, and Switzerland with its TV stations. The benefits of this reach are not exclusive to our advertising customers. The Group is using it to establish digital business units with sustainable growth, such as in e-commerce. To do so, we advertise our own products and brands via our TV stations or acquire new companies in return for media services. The Group is counting on areas such as travel, lifestyle, health, and comparison sites that can be marketed effectively with TV advertising. The Group thus accelerates the growth of its investments and realizes synergies beyond the cost and revenue effects typical for the industry. Examples of this are billiger-mietwagen.de and mydays.de, which have increased their revenues by more than 20 % since being integrated into the Group. ProSiebenSat.1 Group is establishing several e-commerce verticals, which are expected to annually generate revenues of at least EUR 100 million each by 2018. With the travel vertical, the Group is already far in excess of this target.
- Entry via low-risk investment model: In the e-commerce sector, the Group often takes a share in new companies in return for media services. We use TV media as a primary investment currency and, in return, participate in the value creation of these companies in the form of an equity stake (media-for-equity) or a share in revenues (media-for-revenue-share). ProSiebenSat.1 thus expands its portfolio without high cash investments and with limited business risk. We often initially acquire a minority share and learn about market and business models. An example of this is the website moebel.de. The company was fully consolidated in the second half of 2014 and then advertised on TV – moebel.de has since significantly accelerated its growth rate and is increasingly benefiting from synergies with other online comparison sites. In 2015, its revenues increased by over 40 %.
- Promotion of entrepreneurship: The Group works closely with company founders and thus promotes the development of innovative ideas and entrepreneurship in Germany. For three years, the Group has run its own funding program, ProSiebenSat.1 Accelerator, which is aimed at consumer start-ups that address a broad public. These companies benefit in particular from seed funding via TV advertising. Alongside a mentoring program, every participating start-up receives a TV advertising budget worth over EUR 500,000. Since 2013, over 30 start-ups have been through the accelerator program; ProSiebenSat.1 participates in these companies via a variable investment. In parallel, the Group also promotes entrepreneurial thinking within the Group and encourages employees to push ahead with new projects. ProSiebenSat.1 also invests consistently in staff development and gives staff an appropriate share in the Company’s success. Every employee of our Company contributes to enhancing ProSiebenSat.1’s strengths with their knowledge and ideas.
The Internet is creating new ways to reach viewers and users and to address different media-use interests via various digital offerings. New growth areas are thus presenting themselves for ProSiebenSat.1 Group:
Diversification of screens and revenue models: The ways to transmit and receive television content have multiplied. Programs can be called up regardless of time and place and watched on devices other than traditional TV screens, such as smartphones and tablets. With its offerings, ProSiebenSat.1 Group has all modern forms of media use covered. By extending TV formats to digital platforms, the Group increases viewer loyalty while creating new, cross-media advertising space. This is why the Group is also the market leader for the marketing of online video content in Germany. In addition, the Group is increasingly offering more exclusive content on its digital platforms and diversifying its revenue models, e.g. via the video-on-demand (VoD) portal maxdome. maxdome generates its revenues via subscription and pay-per-view income.
In Germany, ProSiebenSat.1 Group reaches around 30 million unique users every month with offers on conventional websites. In 2015, the Group also acquired a majority in the US multi-channel network CDS and integrated the brand into its own platform Studio71. With over five million video views a month, the Group thus operates one of the five largest multi-channel networks in the world and is number one in Germany. Via the maxdome VoD portal, the Group offers over 50,000 series and films and counts among the top 3 in Germany. ProSiebenSat.1 Group aims to also grow sustainably in the Digital Entertainment segment. To that end, the Group will sharpen its international focus with partnerships or further acquisitions. At the same time, the Group is looking to innovative distribution partnerships: The Group has agreed a cooperation with Deutsche Bahn for maxdome. From the end of 2016, maxdome will be the first and only video service available via the on-board entertainment system ICE Portal. Deutsche Bahn counts around 80 million passengers a year on its ICE trains in Germany.