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The ProSiebenSat.1 Group is one of the leading media corporations in Europe. We reach more than 41 million TV households with our free TV stations in Germany, Austria and Switzerland. Free TV financed by advertising is our core business. Alongside a strong digital and ventures portfolio, the Group also has an international production network. This means, ProSiebenSat.1 has a broad and solid revenue and profit basis.
Our free TV stations SAT.1, ProSieben, kabel eins, sixx and SAT.1 Gold are positioned to complement each other and reach all commercially relevant target groups in the German-speaking countries. With our successful stations and far-reaching digital services, we are the leading video sales company in Germany. Our digital activities range from Germany’s largest video-on-demandVideo-on-demand Allows the user to stream or download videos at any time. portal maxdome, the online platform MyVideo and online games from ProSiebenSat.1 Games to SevenVentures GmbH, which is establishing an attractive investment portfolio of media investments. In addition, with Starwatch we own an independent music label. With the Red Arrow Entertainment Group, we produce international TV programs and sell them to TV stations worldwide. Red Arrow is represented with 18 production companies in nine countries. Our headquarters are located in Unterföhring near Munich. ProSiebenSat.1 Media AG was established in 2000. The Group is listed and employs more than 3,000 staff in 12 countries.
There was no legal or structural change to the organizational set-up of the ProSiebenSat.1 Group in 2012; the company is managed centrally by the holding company ProSiebenSat.1 Media AG. However, there have been changes in the scope of consolidation. In December 2012, the Group sold its Northern European TV and radio activities and will now focus on the strategic expansion of its high-growth Digital & Adjacent business. The company acquired additional investments in the USA and Great Britain for its program production area. In addition, the Executive Board was extended by the “Human Resources” division. There is an overview on the individual acquisitions here, while we report on Board personnel changes.
ProSiebenSat.1 Media AG is listed in Germany and headquartered in Unterföhring near Munich.
A stock corporation under German law has three principal governing bodies: the Executive
Board, the Supervisory Board and the Annual General Meeting. The governing bodies’ decision-making powers are strictly demarcated from each other.
The Executive Board is responsible for the ProSiebenSat.1 Group’s overall performance, and has both professional and disciplinary authority over the managers of the various business segments and holding company units. The Supervisory Board monitors and advises the Executive Board in its conduct of business, and is thus directly involved in all corporate decisions of major importance. The basic rules for this dual management system are defined in ProSiebenSat.1 Media AG’s articles of incorporation and in the rules of procedure for the Executive Board and Supervisory Board. The articles of incorporation also define the scope of business activity. According to Section 179 of the German Stock Corporation Act (AktG), they may only be amended by a majority resolution of the Annual General Meeting.
The shareholders of ProSiebenSat.1 Media AG exercise their rights of joint administration and oversight at the Annual General Meeting. Each share of common stock confers one vote. Preference shares carry no voting rights, except where prescribed by law.
In its function as the Group holding company, ProSiebenSat.1 Media AG has no operational role. Its tasks include central financing, Group risk management and the ongoing development of the corporate strategy. The economic development of the ProSiebenSat.1 Group is determined primarily by the subsidiaries held both directly and indirectly.
The present consolidated financial statements include ProSiebenSat.1 Media AG and all significant subsidiaries (page 250) — meaning entities in which ProSiebenSat.1 Media AG directly or indirectly holds a majority of voting rights, or over whose activities it can otherwise exercise a controlling influence.
One of the most important direct subsidiaries of ProSiebenSat.1 Media AG is ProSiebenSat.1 TV Deutschland GmbH. Under this umbrella all German TV stations work together in a cross-function matrix organization. In terms of structure, ProSiebenSat.1 Media AG differs considerably from other German TV companies. Not only does the company own all shares in the TV stations SAT.1, ProSieben, kabel eins and sixx and SAT.1 Gold (since January 2013), it also indirectly holds a 100% stake in the sales companies. This results in advantages with regard to the station programming and the sale of advertising time.
The companies in the online, games and pay TV areas are also affiliated with ProSiebenSat.1 Media AG via subsidiaries consolidated under ProSiebenSat.1 Digital GmbH, SevenSenses GmbH as well as SevenVentures GmbH.
In view of the activities disposed of in Northern Europe and held for sale in Eastern Europe, the ProSiebenSat.1 Group’s operating business activities are divided into three reporting segments that are strategically, economically and technically interrelated and managed by ProSiebenSat.1 Media AG:
The corporate management of the ProSiebenSat.1 Group is carried out centrally by the Group’s Executive Board. The overriding goal is to consistently implement the corporate strategy and to expand the Group from a traditional TV company to a digital entertainment & e-commerce powerhouse. The focus is on sustainably improving profitability. The internal management system at the ProSiebenSat.1 Group is primarily composed of the following elements:
Strategic fields of action defined to establish a digital entertainment & e-commerce powerhouse. We inspire people with first-class entertainment and up-to-the-minute information. We offer advertising customers individual, cross-media advertising concepts. Thanks to the reach and advertising power of our TV stations, we are in an excellent position to establish successful brands. It is our goal to consolidate this strong position in the TV business and simultaneously develop the ProSiebenSat.1 Group further into a digital entertainment & e-commerce powerhouse. We are therefore following a course set to extend our value chain into related growth areas around the core business of TV.
Even after the sale of our TV and radio activities in Northern Europe, we are concentrating on expanding the free TV core business and tapping into pioneering business areas by integrating the television and digital fields. The Group sees great synergy and growth potential here. Our long-term growth targets for consolidated revenues remain in place: By the end of 2015, we aim to realize an additional revenue potential — adjusted for the growth target for the discontinued operations of EUR 150 million — of more than EUR 600 million compared to continuing operations of 2010. With purposeful management, the company has already achieved 50% of its 2015 revenue target by the end of 2012.
In addition to growth and diversification measures, performance factors such as cost awareness and efficient process management are central requirements for the continued strengthening of the ProSiebenSat.1 Group’s leading position. The establishment of a “best practice organization” therefore remains an important strategic task for us. Central requirements for this are uniform process management and a successful internal controlling and risk management system. With the PRIME program, the ProSiebenSat.1 Group has systematically mapped all processes in the Group including risks, and thus has an efficient and transparent control instrument in process management. At the same time, the company provides the required conditions for a culture of top performance by, for example, promoting networking between all the different departments and the transfer of knowledge with the aid of “best-practice-sharing days”. A key requirement for the effectiveness of management is clear objectives for employees at all company levels (Management by Objectives). In 2012, the Group continued to intensify its measures for HR development and talent promotion and linked them more closely to corporate strategy goals. High-performing and motivated employees, guided by a common sense of mission, are the heart of our best-practice organization.
|1. Expand and strengthen the core business of TV financed by advertising in German-speaking countries.||2. Develop new business models in related areas and extend the value chain into digital activities.||3. Ensure quality and efficiency through outstanding implementation.|
The ProSiebenSat.1 Executive Board manages the Group with a number of key performance indicators. These key performance indicators are derived from the above-mentioned strategic fields of action of the ProSiebenSat.1 Group and broken down for its individual segments and operating units. The parameters we use enable us to measure the success of our strategic goals. The defined financial performance indicators are oriented toward the interests and requirements of the ProSiebenSat.1 Group’s equity providers and lenders:
The company operates in an industry environment characterized by a dynamic change process. It is therefore particularly important that the different operating units act flexibly and can quickly take advantage of market opportunities that arise. For this reason, while the individual subsidiaries operate on the basis of central objectives, they are also autonomous with full responsibility for revenues and earnings.
Alongside financial key performance indicators, operational parameters also serve the ongoing control of our customer, market and service-related achievement of targets. The audience share of free TV stations is one of the most important operating indicators. They are indicators for the popularity of ProSiebenSat.1 Group TV station programs and are an important means of documenting performance for the advertising industry in consequence. Deviations in current ratings from anticipated planning figures are assessed as part of early risk detection. For the advertising market, indicators of brand awareness and advertising effectiveness are also important performance values. The performance of pay TV stations is measured and controlled using subscription figures. For online business in the Digital & Adjacent segment, the number of unique users is relevant among other things. Additional significant parameters in the video-on-demandVideo-on-demand Allows the user to stream or download videos at any time. area are technical availability and the number of users or subscribers.
In addition to these internal performance indicators, the Group-wide management and planning process includes external indicators. Current economic data, such as the trend in private consumption, incoming orders, retail sales and gross domestic product serve, for example, as relevant indicators for advertising companies’ willingness to invest.
|Central financial parameters||> Revenues
> Recurring EBITDA and recurring EBITDA margin
> EBITDA and EBITDA margin
> Free cash flow
|Selected operational parameters||> Audience shares
> Unique users
> Users and subscribers
Planning targets are developed as part of the strategy-setting process. The Executive Board of ProSiebenSat.1 Media AG decides the corporate strategy, and as a consequence the shortterm and long-term operational planning targets for the Group and its segments centrally. The objectives are assessed annually in the strategy meeting. The decision-making process involves current market and competition analyses as well as SWOT analyses. These systematic assessments of market conditions and competitive situations form a basis for assessing risks, prioritizing opportunities and defining measures for achieving targets. Strategic planning is firmly integrated in the operating processes. The budget preparation process for the next twelve months follows from the definition of the strategic goals at the end of each financial year, as does the multi-year plan. All employees are required — independently of the formal process — to deal sensibly with potential risks for the company and to analyze and take any opportunities that arise.
Systematic planning process serves purposeful management. The planning is based on strategic and operating corporate objectives. For this purpose, the ProSiebenSat.1 Group determines internal targets for the indicators explained above — for the individual subsidiaries of the Group, for the corresponding segments and for the Group as a whole. The individual steps of the planning processes — monthly reporting, budget preparation and the multi-year plan — are coordinated systematically. This approach is a matter of fundamental importance for managing target figures and assessing risks and opportunities effectively.
(Operating plan for the year on a monthly basis)
|The operating plan for the year is prepared on the basis of ’mixed planning’. This process is a chronologically staggered combination of top-down and bottom-up planning. In the first stage, the Executive Board defines the superordinate targets for the Group (top-down). These are based on in-depth analysis of the company and its environment. The detailed planning of how these targets are to be achieved then occurs in the second stage at the operational level (bottom-up). To this end, company-specific data relating to individual subsidiaries is aggregated at segment and Group level via the income statement, the preparation of the statement of financial position and the cash flow statement. Here, particular account is taken of projections about volumes and prices, program scheduling, costs and investment planning, and staffing plans. The company prepares the budget at the end of a financial year for the following year. It reports target figures on a monthly basis and is passed by the Executive Board and the Supervisory Board.|
(Long-term corporate plan on a quarterly basis)
|The budget is the foundation of the multi-year plan: Planning figures are set on a quarterly basis for the financial and operating management indicators. The planning figures are based on the Group’s strategy and take management findings and estimates into account. Like the budget, these target figures for the next five years are calculated from the bottom up.|
|Monthly reporting is an element of short-term control. With the help of trend projections during the year, the company continuously compares actual figures with the budget and, if necessary, introduces counter measures. To this end, the expected development of revenue, earnings and cash flows for the current year is calculated and compared to the budget on the basis of actual figures. Apart from this monthly reporting to the Executive Board and the Supervisory Board, potential risks are reported to the Group Risk and Compliance Officer as part of the quarterly reporting process. Any changes to the previously mentioned early warning indicators over time are analyzed in particular here. This ensures that suitable management measures can be instigated in a timely manner.|
|Strategic objectives are determined in the strategy meeting.|
ProSiebenSat.1 Media AG has to comply with a large number of stock exchange and legal regulations. As a stock corporation listed in Germany, it is in particular subject to German laws that govern corporations, co-determination, and the capital markets, and it must observe the recommendations of the German Corporate Governance Code. Important reporting obligations that result from the legal requirements for this management report are shown below:
The Compensation Report describes the main features of the compensation system for the Executive Board and Supervisory Board of ProSiebenSat.1 Media AG and explains the structure and level of compensation of the individual members of the Executive Board and Supervisory Board. It is part of the audited Group Management Report and complies with the relevant legal regulations; it also takes into account the recommendations of the German Corporate Governance Code in the version of May 15, 2012.
In addition to their functions as directors and officers of the Company, the members of the Executive Board of ProSiebenSat.1 Media AG also have contractual relationships with the Company. The ProSiebenSat.1 Media AG Supervisory Board is responsible for making the employment agreements with the members of the Executive Board. The Executive Board employment agreements have a maximum term of five years and also regulate the compensation. After a proposal by the Compensation Committee, the structure and amount of the Executive Board compensation are defined by the Supervisory Board and regularly reviewed. The criteria for appropriate compensation are, on the one hand, the individual Board members’ personal performance and areas of work and responsibility and, on the other hand, the amount and structure of executive board compensation in comparable companies, the Company’s business situation and the ProSiebenSat.1 Media AG compensation structure.
The compensation system for the Executive Board of ProSiebenSat.1 Media AG aims to create an incentive for sustainable company performance. It is composed of fixed and results-based components. In the 2012 financial year, Executive Board compensation comprised the following components:
The following total compensation was determined for the Executive Board members appointed by the Company as of the close of the 2012 financial year:
|in Tsd. Euro||Annual salary||Total||Multi-year variable annual compensation (conversion from annual compensation)||Expenses from share-based compensation in the financial year||Pensions|
|Fixed base salary||Variable annual compensation||Fixed fringe benefits3||Current service cost4||Defined benefit obligation|
|1Three-month basis: Member of the Executive Board since October 1, 2011. 2Three-month basis: Member of the Executive Board since October 1, 2012. 3Includes lease payments for use of company car and insurance premiums (excluding D&O). 4Service costs in line with IFRS for the pension entitlement acquired in the respective financial year. Not including entitlements from the individual’s own payments (as of December 31, 2011 and December 31, 2012).|
|Dr. Christian Wegner||2012||500.0||383.4||17.4||900.8||-||377.1||54.8||65.8|
The stock options held by active members of the Executive Board developed as follows in the 2012 financial year:
|Shares on January 1||Exercised in the financial year / repurchased||Shares on December 31|
|Number||Weighted average of strike prices||Number||Weighted average share price||Weighted average of strike prices||Number||Weighted average of strike prices||Range of strike prices||Weighted average of remaining contract duration|
|Thomas Ebeling||2012||315,000||1.58 €||105,000||19.35 €||1.58 €||210,000||1.58 €||1.58 €||3.00|
|2011||525,000||1.58 €||210,000||15.39 €||1.58 €||315,000||1.58 €||1.58 €||4.00|
|Axel Salzmann||2012||240,000||5.19 €||60,000||19.35 €||1.58 €||180,000||6.39 €||€ 1.58-16.00||2.67|
|2011||450,000||6.39 €||210,000||17.90 €||7.76 €||240,000||5.19 €||€ 1.58-16.00||3.75|
In financial years 2010 and 2011, no stock options were granted to members of the Executive Board.
Andreas Bartl, who left the Executive Board in the year under review, received the following compensation in 2012:
|EUR k||Annual salary||Total||Multi-year variable annual compensation (conversion from annual compensation)||Expenses from share-based compensation in the financial year||Pensions|
|Fixed base salary||Variable annual compensation||Fixed fringe benefits2||Current service cost3||Defined benefit obligation|
|1Andreas Bartl was appointed to the Executive Board until February 29, 2012. His contract of employment ended as of December 31, 2012. 2Includes lease payments for use of company car and insurance premiums (excluding D&O). 3Service costs in line with IFRS for the pension entitlement earned in the financial year. Not including entitlements from the individual’s own payments (as of December 31, 2011 and December 31, 2012).|
The stock options of Andreas Bartl, who resigned from the Executive Board in 2012, developed as follows in the reporting period:
|Shares on January 1||Exercised in the financial year / bought back||Shares on December 31|
|Number||Weighted average of strike prices||Number||Weighted average share price||Weighted average of strike prices||Number||Weighted average of strike prices||Range of strike prices||Weighted average of remaining contract duration|
|Andreas Bartl||2012||315,000||8.45 €||175,000||21.98 €||11.47 €||140,000||4.67 €||1.58 €-16.00 €||2.79|
|2011||425,000||8.24 €||110,000||15.39 €||1.58 €||315,000||8.45 €||1.58 €-16.00 €||3.52|
The Company has granted neither loans nor provided guaranties or warranties to the members of the Executive Board.
In the 2012 financial year, total compensation (pensions) was paid to former Executive Board members amounting to EUR 0.3 million (previous year: EUR 0.3 million). As of December 31, 2012, pension provisions for former members of the Executive Board according to IFRS amounted to EUR 8.7 million (previous year: EUR 7.8 million).
In the 2012 financial year, 51,000 stock options were bought back or exercised by former members of the Executive Board. The weighted average strike price was EUR 1.58 per option, the weighted average exercise price amounted to EUR 20.49 per option.
In the 2012 financial year, there were additions to pension provisions for active and former Executive Board members in line with IFRS totaling EUR 2.9 million (previous year: EUR 1.3 million). Of this amount, EUR 2.4 million was for personnel expenses (previous year: EUR 0.9 million) and EUR 0.5 million (previous year: EUR 0.4 million) for interest expenses. As of December 31, 2012, pension provisions for active and former Executive Board members totaled EUR 12.8 million (previous year: EUR 10.1 million).
The Executive Board members are involved in group liability insurance (D&O insurance). This D&O insurance covers the personal liability risk should Executive Board members be made liable for financial losses when exercising their professional functions for the Company. The insurance includes a deductible according to which an Executive Board member against whom a claim is made pays a total of 10% of the claim in each insured event, but not more than 150% of the respective fixed annual compensation for all insurance events in one insurance year. The relevant figure for calculating the deductible is the fixed remuneration in the calendar year in which the infringement of duty occurred.
The compensation of the Supervisory Board is set in the articles of incorporation of ProSiebenSat.1 Media AG. Members of the Supervisory Board receive fixed annual compensation. It amounts to EUR 50,000 for the ordinary Supervisory Board members and EUR 100,000 each for the Chairman and the Vice Chairman. In addition, meeting honoraria are paid for contributing to the committees. This amounts to EUR 3,000.00 per meeting attended for ordinary members of the Audit and Finance Committee, and EUR 1,500.00 per meeting attended for ordinary members of any other Committee. Committee Chairmen receive twice the standard meeting honorarium. No performance-based variable compensation is granted.
Supervisory Board members received the following compensation for the 2012 financial year:
|EUR k||Fixed base compensation||Meeting honoraria Presiding Committee||Meeting honoraria Audit and Finance Committee||Meeting honoraria Compensation Committee||Total|
|1Member of the Supervisory Board since May 15, 2012. 2Member of the Supervisory Board until May 15, 2012. 3Member of the Supervisory Board from July 1, 2011 until May 15, 2012. 4Member of the Supervisory Board until June 30, 2011.|
|Johannes Peter Huth||2012||100.0||-||12.0||6.0||118.0|
|Drs. Fred Th. J. Arp1||2012||31.3||-||-||3.0||34.3|
|Herman M.P. van Campenhout3||2012||25.0||-||-||3.0||28.0|
|Lord Clive Hollick||2012||50.0||1.5||-||-||51.5|
|Dr. Jörg Rockenhäuser||2012||50.0||1.5||-||-||51.5|
|Adrianus Johannes Swartjes4||2012||-||-||-||-||-|
|Prof. Dr. Harald Wiedmann||2012||50.0||-||30.0||-||80.0|
In addition to this fixed annual compensation or meeting honoraria, the members of the Supervisory Board were reimbursed for all out-of-pocket expenses and received compensation for the sales tax levied on their compensation and out-of-pocket expenses.
D&O insurance covers the personal liability risk should Board members be made liable for financial losses when exercising their functions. No deductible has been agreed for members of the Supervisory Board.
Members of the Supervisory Board received no remuneration or other consideration for personal services, especially consulting and mediation services, during the 2012 financial year. Members of the Supervisory Board do not receive loans from the Company.
The German TV market is characterized by a dual broadcasting system with private providers as well as financially strong public broadcasting. The private television market is mainly organized in two families of stations: The ProSiebenSat.1 Group, the market leader in the German advertising market, and the RTL Group. While the private providers operate as independent commercial enterprises, funding of public broadcasting is guaranteed by law and is ensured by the license fee. In 2012, the fee was EUR 17.98 per TV. In 2000, it was DM 28.25 or EUR 14.44. In addition, the institutions generate revenues from advertising and sponsorship. In 2012, gross advertising revenues of ARD totaled EUR 262.3 million, while ZDF generated EUR 246.5 million. In 2011, the corresponding figures were EUR 266.8 million for ARD and EUR 233.1 million for ZDF. Each year, public broadcasting receives fees of approximately EUR 7.5 billion.
In January 2013, various new legal regulations came into effect. Instead of the device-related license fee, a broadcasting fee is now being charged on all households, regardless of whether they own a TV or radio set. In addition, at the start of the year a sponsorship ban came into force in public television after 8 p.m. and on Sundays and public holidays. This is in line with private broadcasting companies’ demand that public broadcasters stop being funded by advertising. In countries such as Great Britain, public broadcasters are funded entirely by revenues from fees. For this reason, in no European country do the public broadcasters have similarly high budgets to those in Germany. Due to increasing revenues from license fees at the public stations, the financial bases of the private providers in Germany are becoming increasingly imbalanced, as the following graph shows:
In order not to endanger the financing model of the private providers, a clear restriction should apply to the digital and online services of the public stations in harmony with the public service mission. The following examples provide insight into the current competitive situation:
While a planned joint video-on-demand platform of ProSiebenSat.1 Media AG and Mediengruppe RTL was prohibited in 2011 due to the dominant position of both companies in the TV advertising market, in 2012 subsidiaries of public institutions established the company ”Germany’s Gold“ in order to operate a commercial video-on-demandVideo-on-demand Allows the user to stream or download videos at any time. platform. The question of whether this would distort competition is currently still being examined by the antitrust authorities.
Furthermore, public broadcasting is continuing its expansion with the establishment of new digital TV stations. The public stations are reaching fewer and fewer young people with their main channels, ARD and ZDF. In 2012, the average market share among 14 to 29 year olds was 4.7% for ARD and 4.0% for ZDF. In order to counteract this trend, the public stations are planning measures such as the establishment of a new channel for young people. Since three public news channels, four cultural channels, one entertainment and one service channel, as well as the principal stations, are already being financed through license fees, private broadcasters consider this excess supply of digital stations should be reviewed before discussing the establishment of new stations.
Regulatory conditions for private broadcasting in Germany. In Germany, television is controlled by a large number of quantitative and qualitative restrictions and is more heavily regulated than other media types. For example, advertising time for German TV stations is restricted to a maximum of twelve minutes per hour, while opportunities to place advertising in certain programs are limited. As well as time and content-related advertising restrictions, media concentration legislation and programming restrictions regulate private broadcasting in Germany, in addition to generally applicable conditions for the protection of young people and of copyright. To ensure plurality of opinion, for instance, SAT.1 is legally required to finance regional programs for a total of five broadcast areas and to broadcast these parallel to prime time. In accordance with the requirements of the Interstate Broadcasting Treaty, SAT.1 also funds formats produced independently by third-party companies and for the content of which the latter are responsible.
Globalization of competition demands new media structures. Increasing digitalization and the growing importance of online services open up far-reaching opportunities for growth to the ProSiebenSat.1 Group. At the same time, an increasing number of international competitors such as Google and Facebook are entering the German media market that are not subject to the same regulatory framework. Due to the increasing prevalence of convergent devices such as smart TVs, tablets and smartphones, new media offerings are competing directly with traditional television on the same screens. Therefore, ProSiebenSat.1 believes that new media structures are required that create uniform regulation criteria for all providers of audiovisual content on the German market, thus ensuring fair competition. For this reason, in 2013 the ProSiebenSat.1 Group will further intensify the cross-media dialog about reforming the regulation in an increasingly global market.
Refinancing via HD distribution revenues is becoming increasingly important. The German media market is dominated by a few large cable network operators. Since the takeover of Kabel Baden-Württemberg by Unitymedia at the end of 2011, there are now only two large providers: Unitymedia, reaching approximately 6.9 million households, and Kabel Deutschland with a reach of approximately 8.6 million households. The consolidation continued in 2012, with Kabel Deutschland GmbH announcing the acquisition of TeleColumbus GmbH, although this still requires the approval of the Federal Cartel Office. With approximately one million households, TeleColumbus is currently the third-largest cable network operator in Germany.
In Germany, TV stations pay feed-in fees to the large regional cable network operators. Both private and public TV stations pay analog suppliers approximately EUR 0.22 per household for the supply of programs. In contrast, cable network operators in many European markets, such as in the majority of Scandinavia, repay part of their revenues to the TV stations for the provision of the content. However, refinancing via distribution revenues is becoming increasingly important for German TV stations. When transmitting their programs in high definition (HD), the ProSiebenSat.1 stations already take a share in the technical access fees imposed by cable network and IPTVIPTV Stands for Internet Protocol Television (IPTV). Films and television are transmitted over the internet — and in contrast to traditional broadcasting, not via cable or satellite. IPTV is neither a standard nor a design, and therefore only a generic term that may be encountered in various forms. platform operators. Since 2010, the ProSiebenSat.1 Group has had an agreement with numerous providers such as Kabel Deutschland and Unitymedia on the supply and transmission of its German HD stations. In 2012, the Group expanded its IPTV agreement with Deutsche Telekom and also concluded additional agreements with new and existing partners. With the growing number of internet-enabled TV sets, revenues from so-called “over-the-top” distribution such as video-on-demandVideo-on-demand Allows the user to stream or download videos at any time. services are increasing in importance, alongside revenues from the distribution of linear HD services.
Analog satellite signal switched off. In April 2012, Germany was one of the last European countries to switch off the analog satellite signal. Digital transmission is less susceptible to faults and enables better sound and picture quality, such as HD television. At the same time, more programs can be broadcast with the digital TV signal. In the long-term, the analog cable signal is also to be switched off in Germany.
According to the International Monetary Fund (IMF), real economic growth in 2012 was at 3.2% and had therefore declined for the second time in succession (previous year: 3.9%). After a good start, the global economic situation was negatively affected over the year by the European debt crisis, the subdued growth rate in important emerging economies and uncertainty over the USA’s fiscal path.
The economy in the euro zone was recessive in the past year due to the unsolved sovereign debt crisis: After stagnation in the first quarter, there was decline in both the second and the third quarter (-0.2% and -0.1% respectively on preceding quarter). With minus 0.6%, the final quarter fall significantly below the level of the preceding quarter. For 2012 as a whole, this means a decline by 0.5% (previous year: +1.4%) of the economic performance in the euro zone.
However, Germany again closed the year significantly better than its large European neighbors, even though momentum let up somewhat during the year: In the first and second quarter of 2012, GDP grew by 0.5% and 0.3% respectively compared to the preceding quarter. In the third quarter, economic performance increased by 0.2% only; the fourth quarter significantly stayed behind the preceding quarter with a decline of 0.6%. In the year as a whole, GDP rose by a total of 0.7% compared to 2011 (previous year: 3.0%). The German export economy was robust despite the difficult international environment and the weaker fourth quarter and was again the most important driver of growth, climbing 4.1%. Private consumption, too, increased in comparison to the previous year and strengthened the German economy with growth of 0.8%. The positive sentiment in private consumption was supported by continued stability of the employment market and higher household incomes with moderate inflation (+2.0%).
Price, season and calendar adjusted; source: Destatis.
According to Nielsen Media Research, gross investments in TV advertising in Germany increased by 2.0% to EUR 11.34 billion in 2012 (previous year: EUR 11.11 billion). In the fourth quarter, gross advertising investments increased by 0.8% to EUR 3.69 billion (previous year: EUR 3.66 billion). In this environment, the ProSiebenSat.1 advertising sales company SevenOne Media increased its gross TV revenues in 2012 by 3.2% to EUR 4.85 billion (previous year: EUR 4.70 billion). In the fourth quarter, too, SevenOne Media was well above the market average with growth of 1.5% or EUR 1.60 billion (previous year: EUR 1.58 billion). Thus, SevenOne Media raised its market share by 0.5 percentage points to 42.8% and extended its lead in the German TV market.
Gross expenditure allows only limited conclusions to be drawn on actual advertising revenues, as they do not take into account discounts, self-promotional advertising and agency commissions. Moreover, the gross figures from Nielsen Media ResearchNielsen Media Research Subsidiary of the American market research institute AC Nielsen. Nielsen Media Research, based in Hamburg, is devoted to monitoring the advertising market. It determines the gross advertising revenues (AdEx data) of the most important media types and advertising media (television, consumer and trade magazines, newspapers, radio, online and billboards) according to economic field, product group and family, company and brand. also include TV spots from media-for-revenue-share and media-for-equity deals. Under these models, the ProSiebenSat.1 Group invests media services in return for a revenue and/or equity share in start-up companies. The Group introduced the media-for-revenue-share and media-for-equity models in 2009 and reports them in the Digital & Adjacent segment.
Source: Nielsen Media Research, SevenOne Media; without N24 and 9Live.
Among traditional media, TV grew the most in 2012 with an increase of 0.5 percentage points and achieved a share of 43.3% in the German gross advertising market, while the print industry gave up 2.3 percentage points. The internet increased its share in the gross advertising market to 11.0% (previous year: 9.5%).
Source: Nielsen Media Research.
According to our own estimates, the volume of the German TV advertising market in 2012 based on net figures increased year-on-year (+1.0 to +2.0%). ProSiebenSat.1 benefited from the positive price trend in the TV advertising market and increased the cost per million (CPM) of its stations on a gross basis (SAT.1: +4.9%; ProSieben +7.1%; kabel eins +4.7%). In addition to moderate price increases, the successful expansion of new customer business was an important revenue driver: As in the previous year, SevenOne Media turned over more than EUR 100 million with new TV customers in 2012. The majority of the top 10 industries increased their TV advertising expenditure and the share of the TV budget in the media mix in 2012; the sectors with the highest growth rates were the automotive and telecommunications industries.
In 2012, the ProSiebenSat.1 Group generated gross revenues of EUR 294.9 million by selling online advertising space, well ahead of IP Deutschland, its direct competitor, with EUR 180.4 million. SevenOne Media achieved gross revenues of EUR 110.6 million by selling online video advertising, which is a market share of 44.8% (IP Deutschland: 27.5%). Thus, ProSiebenSat.1 continued to extend its leading position in the sale of video advertising on the internet, too. In 2012, the gross volume of the advertising market for online video grew by a considerable 26.4%, amounting to EUR 246.8 million (previous year: EUR 195.3 million). Overall, gross revenues of EUR 2.892 billion (previous year: EUR 2.465 billion) were generated in the German online advertising market, which includes video and traditional banner advertising. This corresponds to a growth rate of 17.3%.
In Austria and Switzerland, too, ProSiebenSat.1 benefited from market growth and increased its share in the gross advertising market. In particular, SevenOne Media Austria developed strongly in 2012 with growth of 1.3 percentage points to 32.2% (previous year: 30.3%). In other international markets in which the ProSiebenSat.1 Group was active in the previous financial year, advertising revenues developed inconsistently.
|Change from previous year|
Some of the data presented is based on gross figures and therefore only provide a limited idea of what the associated net figures will prove to be. Germany: gross, Nielsen Media Research. Austria: gross, Media Focus. Switzerland: gross,.
Media Focus. Denmark: net, DRRB. Sweden: net, IRM. Norway: net, IRM. Finland: net, TNS Media Intelligence. Hungary: net, own calculations/estimates. Romania: net, own calculations / estimates.
Two major events shaped the German TV audience market in 2012: The European Football Championship and the Olympic Games. While the public broadcasters increased their ratings among 14 to 49 year olds by broadcasting the two sporting events (ARD: +0.4 percentage points; ZDF: +0.6 percentage points), the audience shares of Germany’s major private stations fell short of the previous year’s figures.
With its German free TV stations SAT.1, ProSieben, kabel eins and sixx, the ProSiebenSat.1 Group reached a combined audience share of 27.8% in 2012 (previous year: 28.9%). This group of stations was once again the market leader among 14 to 49 year olds and was ahead of the RTL Group with 27.3% (previous year: 29.3%). Women’s station sixx, launched in 2011, doubled its annual market share from 0.5% to 1.0%, thus making an important contribution to overall ratings. Particularly popular were programs of the free TV stations such as “Knallerfrauen” (up to 21.7%; SAT.1), “ran — UEFA Europa League” (up to 20.3%; kabel eins) and "The Voice of Germany" (ProSieben and SAT.1). The second series of the music show achieved an average audience share of 23.4% among 14 to 49 year olds.
The Austrian TV channels SAT.1 Österreich, ProSieben Austria, kabel eins austria, sixx Austria and PULS 4 extended their lead among private station groups in the last financial year and achieved an audience share of 20.8% in 2012 after 20.2% in the previous year. Programming on PULS 4 and the newly launched women’s channel sixx Austria scored particularly well with audiences. In 2012, PULS 4 posted a ratings increase of 0.4 percentage points to 3.7% (previous year: 3.3%), thanks to the newly acquired rights to the football Champions League, among other things. sixx Austria went on air in July 2012 and established itself extremely successfully in the Austrian TV market in its first six months with an audience share of 1.1% in the core target group of 12 to 49 year olds.
The Northern European TV stations, whose sale the ProSiebenSat.1 Group announced in December 2012, also performed positively in the previous financial year. Combined market shares increased year-on-year in all Scandinavian countries: In Denmark, Kanal 4, Kanal 5, 6’eren and The Voice achieved a combined market share of 18.9% in 2012 and were thus 2.7 percentage points above the previous year (16.2%). The Group’s Swedish stations posted an increase of 0.4 percentage points in combined market share and closed the year at 14.2% (previous year: 13.8%). The four Norwegian TV channels gained 1.6 percentage points in 2012, bringing them to 19.0%. In Finland, the ProSiebenSat.1 Group posted a 1.3 percentage point increase of combined market share to 6.4% with its stations TV5 and Kutonen. In the Eastern European channels, whose planned sale has been announced, the group market shares declined.
|In percent||Q4 2012||Q4 2011||2012||2011|
Figures for Germany, Austria and Switzerland are based on 24 hours (Mon–Sun), audience shares in the other countries are based on extended prime time (RO, FI: 6 pm to midnight /SE, NO, DK, HU: 5 pm to midnight). Germany: SAT.1, ProSieben, kabel eins, sixx; key demographic age 14 –49; sixx: data released only from February 2011; in the 2011 calculation, 0 is used for the calculation of January. Austria: SAT.1 Österreich, ProSieben Austria, kabel eins austria, sixx Austria (since July 2012), PULS 4; key demographic age 12 –49; sixx Austria: in the 2012 calculation, 0 is used for the calculation of the period up to July 3, 2012; market share of July 3 to December 31, 2012: 1.1%, in the fourth quarter: 1.1%. Switzerland: SAT.1 Schweiz, ProSieben Schweiz, kabel eins Schweiz; key demographic age 15 –49; all data are based on daily weighting and since 2011 include solely the use
of the Swiss signal/program window. Denmark: Kanal 4, Kanal 5, 6’eren, The Voice; key demographic age 15 –50, based on 14 advertising– financed TV stations. Sweden: Kanal 5, Kanal 9; key demographic age 15 –44. Norway: TVNorge, FEM, MAX, The Voice (to January 22, 2012), VOX (from January 23, 2012); key demographic age 12 –44. Finland: TV5, The Voice (to August 30, 2012), Kutonen (from September 1, 2012); key demographic age 15 –44. Hungary: TV2, FEM3, PRO 4 (since March 2011); Super TV2 (since November 2012); key demographic age 18 –49; Super TV2: market share in November 2012: 0.8%, in December 2012: 0.7%. Romania: Prima TV, Kiss TV; key demographic age 15 –44; due to methodological changes it is not possible to compare data from 2011 and 2012.
ProSiebenSat.1 Networld is one of the leading online networks in Germany and counts approximately 25 million unique usersUnique user The “unique user” is the basis of the AGOF Internet Facts. The unit expresses how many people in a given period were exposed to an advertising medium or individual booking units and equates to net reach. The unique user is the basis for the calculation of the reach and audience structure of online advertising media and the regulation of essential factors for media planning such as weekly consumption, monthly consumption and building exposure. every month. ProSiebenSat.1 is already in a good position, especially in the dynamic growth market of online video: As part of its digitalization strategy, the Group is successively expanding the internet platform MyVideo to become an online TV station. In 2012, MyVideo recorded 7.7 million unique users per month (previous year: 7.9 million). The number of users of premium videos on MyVideo rose to 4.32 million per month (previous year: 4.03 million). In the year as a whole, the portal’s video views climbed to 490 million, compared to 340 million in the previous year. The number of registered users grew to 11.8 million in 2012 (previous year: 9.3 million). With its successful “online-first” premieres — where MyVideo shows licensed US series before they are broadcast on German free TV — the portal generated 44 million video views.
maxdome remains the market leader among video-on-demandVideo-on-demand Allows the user to stream or download videos at any time. providers in Germany. In 2012, maxdome considerably expanded its customer base and showed again a revenue growth. At the end of the year, the online video library had approximately 800,000 active households (previous year: around 500,000).
A sharp rise in user numbers was seen in Online Games, too: The number of registrations on ProSiebenSat.1´s online gaming portals almost doubled, growing to 16.0 million (previous year: 8.2 million). Games from the licensing partnership with Sony Online Entertainment made a particular contribution to this increase. The market for online games is the world’s fastest growing entertainment industry.
|MyVideo (video views)||490.0||340.0|
|maxdome (active households)||0.8||0.5|
|Online Games (registrations)||16.0||8.2|