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CAPITAL MARKETS DAY – NOVEMBER 14, 2018
ENTERTAINMENT
CONTENT
WOLFGANG LINK
ENTERTAINMENT
ENTERTAINMENT SEGMENT: STATUS QUO AND AMBITION
STATUS QUO1) AMBITION IN ~5+ YEARS
REVENUE GROWTH REVENUE GROWTH
±0% 2016-2018E2) +0-5% 2018-2023+2)
DIGITAL REVENUE DIGITAL REVENUE
10% SHARE3) 25% SHARE3)
SMART ADVERTISING SMART ADVERTISING
5% SHARE4) 25% SHARE4)
CHANGING CONSUMER BUILD AN ATTRACTIVE LOCAL
PREFERENCES AND PORTFOLIO & MAXIMIZE DIGITAL
CONSUMPTION PATTERNS REACH ON ALL PLATFORMS
1) Q3 2018 LTM; 2) CAGR; 3) Rough indication based on allocation of Entertainment business units to digital vs. non-digital clusters; digital revenues include digital content and revenues generated by
digital/tech-driven services; 4) Smart advertising share of Entertainment advertising revenues; smart advertising includes targetable products both linear and digital 91
Source: P7S1 company data
ENTERTAINMENT | CONSUMER
FUTURE-FIT
ENTERTAINMENT
1 CONSUMER
CONSUMER LOCAL TOTAL DIGITAL AND TOTAL
1 2 3 4
FIRST CONTENT LINEAR REACH MONETIZATION
92
ENTERTAINMENT | CONSUMER
INDUSTRY TRENDS
KEY MARKET DEVELOPMENTS
Social
Increasing PayVoD Internet Entertainment Tech & data
platforms
number of players scale giants push & commerce as success
enrich with
offerings globally into AdVoD converge factors
video
93
ENTERTAINMENT | CONSUMER
CHANGING CONSUMER PREFERENCES
MEDIA CONSUMPTION PATTERNS MEDIA CONSUMPTION MOTIVATION
Anytime, Share memorable
Committed to
anywhere,
content brands TV moments with family
any device and friends
Autonomous & Enjoying snackable
spontaneous
Personalized AdVoD content (on the go)
Deliberately choosing
Impatient & fear
of missing out
Willing to pay SVoD content matching
personal interests
Source: Trend and target group report “Gen Z”, November 2017, P7S1 TV Deutschland Consumer Insights
94
ENTERTAINMENT | CONSUMER
INCREASING
TV PLAYS A KEY ROLE IN THE CONSUMER DEMAND
FOR TOTAL VIDEO
ECOSYSTEM ENTERTAINMENT:
VIEWING
TIME1)
[IN MIN]
233
= MONTHLY
REACH1,2)
[IN %] +8%
(Q3 2018 VS. 2015,
TV 228 227 225 A 14-69)
86% 200-210 78-
83%
A 14-69
157 160
TV 148 144
77% 105-110 67-
A 14-39
72%
FREE
ONLINE VIDEO 63-
35-40 68%
61%
A 14-69 19 22
35-40 40-
13 13 45%
PAYVOD
16 32%
3 5 11
A 14-69
2015 2016 2017 2018E 2023E3)
TV STILL REMAINS SUPERIOR FOR MASS REACH
IMPORTANT MEDIUM FOR BRAND BUILDING
1) Rolling last four quarters, Q4 for 2015-17, Q3 for 2018; 2) Usage at least once a month; 3) Internal
estimates based on historic development and current usage trends 95
Source: ViewTime Report, SevenOne Media, forsa
ENTERTAINMENT | CONTENT
FUTURE-FIT
ENTERTAINMENT
2 CONTENT
CONSUMER LOCAL TOTAL DIGITAL AND TOTAL
1 2 3 4
FIRST CONTENT LINEAR REACH MONETIZATION
96
ENTERTAINMENT | CONTENT
TWO COMPLEMENTARY STRONG CONTENT PILLARS
U.S. FICTION 56% LOCAL CONTENT 44%
GRID GRID
SHARE1) SHARE1)
Historically strong Leverage content across
performance – however, all platforms and increase
increasing SVoD competition 360° exploitation/windowing
Secure future smash hit U.S.
Increase monetization
movies and series (incl.
opportunities
library)
Push global content sales
Flexibilize deal structures for
and enter exclusive talent
multi-platform usage
partnerships
INCREASE RED ARROW STUDIOS’ IN-HOUSE SHARE OF
PRODUCTION TO >30% IN 2023+2)
1) Content mix P7S1 core channels Q3 2018 LTM, market share contribution, in %, Basis: all German TV households (German-speaking), A 14-49, Mon.Sun, 3-3h,
Source: AGF in co-operation with GFK,TV Scope/ProSIebenSat.1 TV Deutschland; P7S1 company data; 2) Red Arrow Studios share of TV channels’ commissioned content spend in % 97
SUPERGIRL © Warner Bros. Entertainment Inc. All rights reserved JOKO WINTERSCHEID & KLAAS HEUFER-UMLAUF © SAT.1/Marcus Höhn
ENTERTAINMENT | CONTENT
INVESTING IN LOCAL CONTENT – MATCHING CONSUMER
DEMAND
Realize
premium
monetization
Increase Push
(daily) digital global content
inventory sales
STRONG
CONSUMER
DEMAND
Differentiate EXEMPLARY: Scale
vs. global Ø AUDIENCE SHARE TVOG1) Red Arrow
digital giants 19% 19% 20% Studios
2015 2016 2017
SEASON 5 SEASON 6 SEASON 7
Benefit
Safeguard
from talent
distribution
partner-
business
ships
Enable
franchising
of content
1) Basis: all German TV households, A 14-49, Mon-Sun, 3-3h; Source: AGF in cooperation with GfK/videoScope/P7S1 TV Deutschland
THE VOICE OF GERMANY © SAT.1/Andre Kowalski 98
ENTERTAINMENT | CONTENT
TOTAL BUY-OUT ENABLES BROADER REACH &
MONETIZATION
SCOPE OF RIGHTS U.S. FICTION GERMAN FICTION3)
LINEAR TV RIGHTS1) Limited runs Total buy-out
CATCH-UP RIGHTS2) Limited windowing Total buy-out
LIBRARY RIGHTS To be acquired separately Total buy-out
BROADEN
PREVIEW RIGHTS Selected
+ Total buy-out REACH AND
MONETIZATION
OFFLINE VIEWING To be acquired separately Total buy-out
3RD PARTY PLATFORM Selected Total buy-out
SVOD To be acquired separately Total buy-out
1) No. of runs; 2) 1st run series; 3) Excluding theatrical feature film co-productions, limitations regarding license territory (limited to EINSTEIN
German-speaking Europe) and license term (generally 7 years) in case of co-financed TV productions (with public film funding) © SAT.1/Martin 99
BaumdahlENTERTAINMENT | CONTENT
EXPAND IN ATTRACTIVE LIVE AND LOCAL GENRES
FACTUAL SHOW/REALITY COMEDY FICTION TREND SPORTS
TAFF © ProSieben/Benedikt Müller THE VOICE OF GERMANY © SAT.1/Andre Kowalski LUKE DIE WOCHE UND ICH © SAT.1/Willi Weber EINSTEIN © SAT.1/Wolfgang Ennenbach
>50% >70% +26% +43% >10M
MARKET VIEW
OF ALL FORMAT OF LIVE ENTERTAINMENT INCREASE IN LOCAL INCREASE IN GERMAN ESPORTS FANS IN 2021
LAUNCHES ARE FACTUAL1) SHOWS ARE ABOVE CHANNEL COMEDY FORMAT FICTION TV FORMATS4) IN GERMANY5)
AVERAGE2) LAUNCHES3)
1) Source: Nota Report, Channels Strategies Analysis 2018 (Western Europe); 2) Base: all German TV households, A 14-49, Mon-Sun, 3-3h, FY 2017; Source: AGF in co-operation with GfK/videoScope; Top 8
channels in Germany (ARD, ZDF, ProSieben, SAT.1, RTL, VOX, RTL II and kabel eins), incl. sports, excl. CEM and ranking show; average format ratings vs. channel average (8-11PM); 3) Source: The WIT
Database, new format launches in 10 European core markets (AT, BE, DK, FR, IS, IT, NO, ES, SE, NL, without UK); 4) Source: The WIT Database, all linear TV channels in Germany, number of titles, 100
Primetime only, new format launches and ongoing seasons; 5) Source: Newzoo, eSports Market Report 2018ENTERTAINMENT | CONTENT
FACTUAL – DAILY CONNECTION WITH VIEWERS
Our famous Factual brands
(e.g. SAT.1 morning show, taff, Endlich Feierabend, Galileo)
Ø 20% Up to 20.5%
Above channel Best market
average (all Factual share for our morning
formats)1) show since 20122)
1) Base: all German TV households, A 14-49, Mon-Sun, 3-3h, YTD 2018; Source: AGF in co-operation with GfK/videoScope /P7S1 TV Deutschland; 2) Base: all German TV households, A 14-49, Mon-Sun, 3-3h
(Top: 15.03.2018); Source: AGF in co-operation with GfK/videoScope /P7S1 TV Deutschland 101
SAT.1 FRÜHSTÜCKSFERNSEHEN © SAT.1/Claudius PflugENTERTAINMENT | CONTENT
STRONG FACTUAL BRANDS – STRONG PERFORMANCE
KEY FACTS FUTURE STRATEGY
Increase in-house competence
+68% 2,850 (e.g., internalize “akte” from mid
2019)
INCREASE IN OUR NET FORMAT
FACTUAL OUTPUT HOURS
2018 VS. 20131) IN 20181)
Establish own in-house news
department
Provide relevant information for
85 Ø 100M all target groups on all platforms
FACTUAL YOUTUBE VIDEO
FORMATS VIEWS PER MONTH
IN 20181) FOR OUR FACTUAL
FORMATS2)
1) Source: P7S1 TV Deutschland, existing formats and own developed one-offs, excluding news, 2018 numbers based on current planning and development funnel; 2) Base: October 2018 (global);
Source: YouTube Analytics 102
RED © ProSieben/Benedikt MüllerENTERTAINMENT | CONTENT
UNRIVALED SHOW BRANDS ARE OUR CORE COMPETENCE
Create relevant
Massively Strong 360°
talk-of-town
successful on all exploitation and
formats for younger
digital platforms monetization potential
audiences
39.7% 43M +30%
Top market share for Digital video views for Mark-up on special ad
GNTM within young Celebrity Big Brother pricing vs. classic ads –
target group1) 2018 (+237%)2) highly sales relevant3)
1) Basis: all German TV households, A 14-29, Mon-Sun, 3-3h (Top: 01.03.2018); Source: AGF in cooperation with GfK/videoScope/P7S1 TV Deutschland; 2) PSD BI and Format Report, Digital Video Views
on O&O channels (Web, App, Smart TV, HbbTV), Syndication & YouTube, Germany only; Percentage increase compares season 6 (2018) with the previous season (2017); 3) Internal company 103
information, comparing avg. pricing of classic campaigns vs. special ad campaigns
GERMANY’S NEXT TOPMODEL © ProSieben/Willi WeberENTERTAINMENT | CONTENT
STRONG FUNNEL OF NEW TOP SHOW FORMATS
THE GREAT BAKE OFF
PROFESSIONALS
DANCING ON ICE © SAT.1 THE VOICE SENIOR © SAT.1 DAS GROßE BACKEN © SAT.1/Claudius Pflug
A YEAR TO REMEMBER © Talpa Germany MASTERS OF DANCE © ProSieben/Willi Weber PROSIEBEN WINTERGAMES© ProSieben
104ENTERTAINMENT | CONTENT
EXPLOIT THE ENTIRE VALUE CHAIN – COMEDY
OVERALL
FRESH COMEDY
2015 2 HOURS INCREASED
Formats BY 9x WITHIN
LAST THREE
YEARS
2016 3 Future
Formats comedy
ecosystem
2017 9
Formats
2018 17
Formats
DIE MARTINA HILL SHOW © SAT.1/Boris Breuer
105ENTERTAINMENT | CONTENT
WE ARE INNO.1
GERMAN TV COMEDY1) 2018 2018
1) As per hours vs. RTL Group, YTD Oct 2018
LUKE! DIE 90ER UND ICH © SAT.1/Boris Breuer 106ENTERTAINMENT | CONTENT
OUR INVESTMENT IN GERMAN FICTION DOUBLED IN 2019
HIGH-END FICTION CRIME DAILY SERIAL FEATURE FILMS
NEW NEW 11.4% 23.2%
BESTSELLER MOVIES CRIMEDY SERIES IN Q1 TOP MARKET SHARE IN TOP
IN FALL 2019 2019 KEY TARGET GROUP1) MARKET SHARE2)
HONIG IM KOPF © 2014 barefoot films GmbH,
SevenPictures Film GmbH, Warner Bros.
ZERSETZT © SAT.1/Britta Krehl DER BULLE UND DAS BIEST © SAT.1/Bernd Schuller ALLES ODER NICHTS © SAT.1 Entertainment GmbH. All rights reserved.
Popular bestseller-brands Unlimited linear & digital rights Digital reach/360° exploitation Attractive business model
Serial approach of characters Brand defining core DNA Increased viewer retention Talent build-up and retention
1) Base: all German TV households, F 14-39, Mon-Sun, 3-3h (Top: 22.10.2018); Source: AGF in co-operation with GfK/videoScope/P7S1 TV Deutschland; 2) Base: all German TV households, A 14-49, Mon-Sun,
3-3h (Top: 26.12.2017); Source: AGF in co-operation with GfK/videoScope/P7S1 TV Deutschland 107ENTERTAINMENT | CONTENT
WE ARE FIRST MOVER IN TREND SPORTS
AMERICAN SPORTS ESPORTS DRONE RACING
39.1% 20% STRENGTHEN
TOP MARKET MARKET GROWTH INNOVATIVE
SHARE1) P.A. UNTIL 20202) SPORTS
RAN NFL © ProSieben MAXX/Bene Müller RAN ESPORTS © Helena Kristiansson DRONE RACING LEAGUE © Drone Racing League
1) Basis: all German TV households, A 14-49, Mon-Sun, 3-3h, YTD Oct 2018. Source: AGF in cooperation with GfK/videoScope/ProSiebenSat.1 TV Deutschland; 2) Source: Deloitte 2018, Germany
108ENTERTAINMENT I CONTENT
KEY ACTIONS EXECUTED BY 2019
U.S. STUDIOS
▪ RE-NEGOTIATE U.S. STUDIO DEALS UNTIL EARLY 2019 (WARNER ALREADY
COMPLETED, OTHER STUDIOS APPROACHED)
LOCAL CONTENT STRATEGY
▪ INVEST +EUR 80M P.A. IN ATTRACTIVE LOCAL CONTENT
~50% IN PROSIEBEN AND ~50% IN SAT.1
>90% IN RELEVANT ACCESS AND PRIME TIME
WITH HIGH DIGITAL RELEVANCE
▪ INCREASE RED ARROW STUDIOS’ IN-HOUSE SHARE OF LOCAL CONTENT
PRODUCTION TO UP TO 20% IN 2019 (E.G., NEW SERIAL COMEDY PT1) SHOW
FOR SAT.1, NEW STRIPPED DAILY DT2) SHOW FOR SAT.1, NEW SERIAL
ENTERTAINMENT PT1) SHOW FOR PROSIEBEN)
ORGANIZATION
▪ FURTHER OPTIMIZE TO DRIVE ONE ENTERTAINMENT ACROSS ENTITIES AND
SIMPLIFY OPERATIONS
1) Prime time; 2) Daytime
GERMANY´S NEXT TOPMODEL
E1
© ProSieben/Willi WeberCAPITAL MARKETS DAY – NOVEMBER 14, 2018
ENTERTAINMENT
REACH
EUN-KYUNG PARKENTERTAINMENT | REACH
FUTURE-FIT
ENTERTAINMENT 3 REACH
CONSUMER LOCAL TOTAL DIGITAL AND TOTAL
1 2 3 4
FIRST CONTENT LINEAR REACH MONETIZATION
110ENTERTAINMENT | REACH
TOTAL REACH AS KEY METRIC
TV DIGITAL TOTAL
REACH REACH REACH
▪ TV stays dominant reach ▪ Strong growth of digital ▪ Lever strong local content
channel video consumption with brands and growth of
▪ Slight decline mainly
driven by young target
+ +46% in avg. minutes
watched1) = digital channels and
aggregators
groups, shifting ▪ Overall increase of ▪ Follow young target
consumption to digital demand for video content groups to their favorite
alternatives platforms
1) Calculation: Figures relate to year-over-year growth Q3/2018 as compared to Q3/2017; Source: ViewTime Report, SevenOne Media, forsa
111ENTERTAINMENT | REACH
ESTABLISH TOTAL REACH AS
ONE KEY METRIC
TOTAL REACH1) TOTAL MINUTES2)
0.5 MILLION 800 MILLION
DIGITAL
CHANNELS
OWN APPS AND
.de
0.5 MILLION 600 MILLION
WEBSITES
+ +
>2.5M
VIDEO VIEWS
WEB-ONLY 8.8 MILLION 4,100 MILLION
CONTENT3) TV
# 1
ENTERTAINMENT
9.7M AVERAGE EPISODE
5,500M SEASON YTD SEPT. 2018
BRAND ON 1) Number of people reached with an average episode of last GNTM season, all people 3+, no double counting, linear TV (live, +3 days time shift) and websites
(Laptop/Browser) as basis from AGF data and proxy for incremental reach through Apps (Mobile, SmartTV) and YT (Digital Channels), rounded; 2) Total minutes watched
INSTAGRAM4) YTD September 2018, LINEAR // Basis (households): all German TV households, 3+, Mon-Sun, 3-3 h; Source: AGF in cooperation with GfK/videoScope/P7S1 TV Deutschland;
GERMANY´S NEXT TOPMODEL
DIGITAL // Basis (devices): TV websites and apps, 7TV, YouTube (without advertising), Germany only; Source: Google Analytics/YouTube Analytics; 112
3) “Let’s Face Reality” web format, May – September 2018, PSD BI // Format Report, Digital Video Views on ProSieben O&O channels (Web, App, Smart TV, HbbTV,
© ProSieben/Willi Weber Syndication) and YouTube; 4) Followers on Instagram in comparison to TV formats and entertainment brands in Germany, October 2018ENTERTAINMENT | REACH
DIGITAL INITIATIVES
FAN DIGITAL AGGREGATOR
COMMUNITIES CHANNELS PLATFORM
EXAMPLES
113ENTERTAINMENT | REACH
GALILEO FAN COMMUNITY
TOTAL VIEWING TIME
SEPTEMBER 2018
[IN MIN BN] “I DIDN’T
KNOW THAT
1.8
Digital [GALILEO]
20% IS ALSO ON TV”
TV
(YOUNG MALE,
22-YEARS OLD)3)
80% 20% of total
viewing time already
on digital platforms1) AUGMENTED TOP 10
AMAZON ALEXA
REALITY APP YOUTUBE
SKILL LAUNCHED
LAUNCHED CHANNEL2)
1) Basis: all German TV households, A 14-49, Mon-Sun, 3-3 h, 01.10.2017-30.09.2018 (1 min of consecutive viewing); Source AGF in cooperation with GfK/videoScope/P7S1 TV Deutschland; 2) Basis:
Monthly YouTube video views Germany (63m video views in September 2018); Source: Tubular; 3) Source: Trend and target group report “Gen Z”, August 2017, P7S1 TV Deutschland Consumer 114
Insights. GALILEO © ProSiebenENTERTAINMENT | REACH
CELEBRITY BIG BROTHER FAN COMMUNITY
29M UP TO 8%
VIDEO VIEWS
LATE NIGHT SHOW
DIGITAL CHANNELS
ON SIXX1)
(x25)3)
14M 126K
VIDEO VIEWS
INSTAGRAM
OWN APPS & WEBSITES
FOLLOWERS (+289%)4)
(+28%)2)
UP TO 20% EXCLUSIVE
DIGITAL CONTENT
BEST TV MARKET
SHARE SINCE 20151)
HIGHLIGHTS
1) Basis: all German TV households, A 14-49, Mon-Sun, 3-3 h. Source: AGF in cooperation with GfK/videoScope/ProSiebenSat.1 TV Deutschland; 2) PSD BI and Format Report, Digital Video Views on
SAT.1 O&O channels (Web, App, Smart TV, HbbTV) & Syndication, Germany only; Percentage increase compares season 6 (17.08. – 31.08.2018) with the previous season (11.08. – 25.08.2017); 115
3) Studio71: Video Views on YouTube, Germany only, 17.08. – 31.08.2018, increase compared to the previous season (11.08. – 25.08.2017); 4) Percentage increase compares Instagram followers after
season 6 (31.08.2018) with the number of followers after the previous season (31.08.2017). PROMI BIG BROTHER © SAT.1/Marcus HöhnENTERTAINMENT | REACH
STUDIO71 GERMANY
1
> BN ~25%
monthly video views in Germany1) Revenue CAGR
over the last three years2)
25% 7 296 220
of the Top-100 of the 10 most web-episodes branded campaigns
YouTube channels popular TV YouTube produced for third in 2018
are S71 talents1) channels are from parties in 2018
Launch in
P7S11) 500K Live events
November
pizzas sold3) sold out
2018
1) Studio71 Germany (generated across the German S71 network) as of 30th September 2018; Source: YouTube Analytics; 2) Revenue growth Studio71 Germany from Q3 2015 LTM to Q3 2018 LTM;
3) Period: Week 42, 2018; Source: Internal data, Studio71; 3) Germany, Period: 15.10.2018 – 31.10.2018 116
CONCRAFTER © Studio 71ENTERTAINMENT | REACH
VERTICAL CONTENT PRODUCTS
LAUNCHING NOVEMBER 2018
58% 25MIN
of GermansENTERTAINMENT | REACH
7TV: NEW AGGREGATOR PLATFORM
~2.5M LARGE AMOUNT OF
AIMING FOR
USERS1) LOCAL CONTENT
10M USERS
WITH UNIQUE
.
LOCAL FOOTPRINT EXCLUSIVE FILMS,
ORIGINALS AND SERIES
.
LIVE SHOWS &
IN 2019 SPORT EVENTS
INVEST
TO CREATE THE
LEADING GERMAN
ENTERTAINMENT HUB
NEW
PARTNER: JOINT FORCES
WITH STRATEGIC
PARTNER
+ ADDITIONAL
PARTNERS
1) Based on number of subscribers already using 7TV, maxdome and Eurosport Player, October 2018
Source: P7S1 company data 118ENTERTAINMENT | REACH
7TV: STATUS UPDATE AND NEXT STEPS
SIMPLE PRICING CONCEPT
REFLECTING MEDIA CONSUMPTION NEEDS PRODUCT TECH PEOPLE
INTEGRATION OF CROSS DEVICE
MAXDOME AND FEATURE
>200
EUROSPORT ASSIMILATION PEOPLE WORKING
EXCLUSIVE PLAYER DONE AS ONE TEAM
PREMIUM ENTERTAINMENT AND
(€) SPORTS CONTENT AND
ADDITIONAL FEATURES
ACCESS TO LIVE TV CONTENT WINDOWING MARKETING
BASIC AND CATCH-UP1) AGREEMENTS FOR STRATEGIC PRICING
(AD) LIGHTHOUSE POSITIONING OF CONCEPT AND
FORMATS AND OWN TV SITES & PREPARATION OF
LOCAL ORIGINALS APPS VS. 7TV “GO-LIVE”
1) Only extract of all available channels
Source: P7S1 company data 119ENTERTAINMENT I REACH
KEY ACTIONS EXECUTED BY 2019
▪ 7TV: FOCUS ON LAUNCH OF NEW PLATFORM BY THE END OF H1 2019
▪ STUDIO71 GERMANY: INCREASE TV CONTENT ON YOUTUBE (YTD +74%)1)
AND START ON FACEBOOK & INSTAGRAM BY Q2 2019; GROW INFLUENCER
CONTENT ON ALL PLATFORMS
▪ FAN COMMUNITIES: LEVERAGE TOP 15 FORMAT BRANDS WITH 360°
CHANNEL EXPLOITATION AND ACCELERATE GROWTH THROUGH OUR
PUBLISHER ECOSYSTEM GLOMEX (YTD +260%)2)
▪ DIGITAL ORIGINALS: DEVELOP NEW DIGITAL ORIGINALS CATERED TO
YOUNGER TARGET GROUPS AND MONETIZE CROSS-PLATFORM
▪ NEW PRODUCTS: RED BUTTON PORTAL RE-LAUNCHED, START DIGITAL FIRST
LIVE SHOWS, DEVELOP PRODUCTS BEYOND PURE VIDEO
▪ TOTAL REACH: TOTAL REACH METRIC READY IN H1 2019
1) Year-to-date growth (last 12 months), YouTube video views of P7S1 TV formats across the German S71 network; 2) Year-to-date growth (last 12 months), video views
GERMANY´S NEXT TOPMODEL of Glomex inventory E2
© ProSieben/Willi WeberCAPITAL MARKETS DAY – NOVEMBER 14, 2018
ENTERTAINMENT
MONETIZATION
SABINE ECKHARDTENTERTAINMENT | MONETIZATION
FUTURE-FIT 4 MONETIZATION
ENTERTAINMENT
CONSUMER LOCAL TOTAL DIGITAL AND TOTAL
1 2 3 4
FIRST CONTENT LINEAR REACH MONETIZATION
121ENTERTAINMENT | MONETIZATION
GROWING TOTAL MONETIZATION
ADVERTISING + DISTRIBUTION + SUBSCRIPTION
B2B business B2C business
B2B business driven
driven by driven by
by TV and digital
commitments subscribers of
ad revenues
of partners OTT platform
122ENTERTAINMENT | MONETIZATION
ATTRACTIVE GERMAN AD SALES MARKET…
LONG-TERM STABLE TV AD MARKET UPSIDE POTENTIAL FOR VIDEO
NET ADVERTISING SPEND, GERMANY1) MEDIA MIX1) [net, in %]
>40% stable P7S1
TV ad market share2)
Digital
11 10
9
30
Print &
Other 40
TV 40% 35
8
32
25% 3
22
2017 2017
2000 - 2017 18 – 23
Others Print Digital Other3) Digital Video TV
1) Magna Global June 2018; 2) Nielsen Media Company October 2018; 3) Digital Other = Display, Social Display, Search, E-Mail-Marketing, DOOH and Other
123ENTERTAINMENT | MONETIZATION
… WITH MASSIVE MONETIZATION POTENTIAL
SEGMENT SIZES BY 2023 VS. 20181) [net, in EUR BN]
20181) 20231) Growth2)
TOTAL AD MARKET ~ 21.3 ~ 23.5 +2%
~18BN
ADDRESSABLE MARKET
FOR P7S1 AD SALES BY 20231)
~ 4.6 ~ 4.8
TV
TV & ADDRESSABLE TV3)
MARKET
VIDEO ~ 1.0 ~ 3.6
SEGMENTS
DIGITAL
SERVED
BY P7S1
DOOH ~ 0.1 ~ 0.4 +7%
+7%
PERFORMANCE ~ 7.0 ~ 8.8 GROWTH OF MARKET
SEGMENTS SERVED BY P7S11)
DIGITAL FREESHEETS ~ 0.04 ~ 0.1
PHYSICAL FREESHEETS ~ 1.8 ~ 1.7
~ 1.1 ~ 1.0
MARKET SEGMENTS
NOT SERVED BY
TRADITIONAL OOH
-8%ENTERTAINMENT | MONETIZATION
OUR PORTFOLIO FULLY ALIGNED WITH MARKET GROWTH
AWARENESS ENGAGEMENT CONVERSION
LINEAR TV CAMPAIGNS & SPECIAL ADS
TV &
TV
ADDRESSABLE TV
ADDRESSABLE TV SWITCH-INS & SPOTS
VIDEO DIGITAL VIDEO ADS
MARKET
SEGMENTS
DOOH OUTDOOR SCREENS SCREENS AT RETAIL
SERVED
DIGITAL
BY P7S1
NEW DATA-DRIVEN INFLUENCER ADS
PERFORMANCE NEW PERFORMANCE-DRIVEN SOCIAL MEDIA
NEW PERFORMANCE RETAIL MEDIA
DIGITAL FREESHEETS SALES PROMO APP
360° SMART REACH
TOTAL REACH
125ENTERTAINMENT | MONETIZATION
6 BUILDING BLOCKS TO CAPTURE GROWTH
360° MONETIZATION
PRODUCTS 1 TOTAL REACH 2 3 SMART REACH
OF VALUE CHAIN
YIELD SALES
ENABLERS 4 TECHNOLOGY 5 6
MANAGEMENT ORGANIZATION
1261 ENTERTAINMENT | MONETIZATION – PRODUCTS
TOTAL REACH DRIVEN BY OWN AND 3RD PARTY REACH
OWN INVENTORY 3RD PARTY INVENTORY
OWN TV OWN DIGITAL STUDIO71 REACH REACH
REACH REACH REACH PARTNERSHIPS NETWORKS
~49 M1) ~24 M2) + ~16 M3) + ~26 M4) ~51 M5)
all P7S1 platforms
EXTENDING POWERFUL TV REACH MORE INVENTORY FOR TARGETING SOLUTIONS
SUPERIOR MARKETABILITY VIA ONE KPI MORE 360° MONETIZATION OPPORTUNITIES
PREMIUM PRICING FOR INCREMENTAL REACH
1) AGF/GfK, VideoScope, September 2018; 2) AGOF September 2018; 3) Studio71; 4) AGOF September 2018; 5) MediaActivity Guide 2018 (SevenOne Media, forsa)
Note: Reach shown as net reach per month 1272 ENTERTAINMENT | MONETIZATION – PRODUCTS
360° MONETIZATION OF THE FULL VALUE CHAIN
ONLINE MOBILE SPONSORINGS
>40%
CUT-IN ON TV PR $
OF AD REVENUES WITH
‘GERMANY’S NEXT TOPMODEL’
FORMAT VIA SPECIAL ADS1)
TV ADVERTORIAL MUSIC
+30%
MARK-UP POSSIBLE ON SPECIAL
EVENTS
PRODUCT PLACEMENT AD PRICING VS. CLASSIC ADS2)
SWEEPSTAKES
SOCIAL PROMO LICENSING +5%
YEARLY GROWTH RATE FOR
SPECIAL AD REVENUES3)
1) Internal analysis of ad sales revenues for Germany’s Next Topmodel format 2018; 2) Internal information, comparing avg. pricing of classic campaigns vs. special ad campaigns
3) Internal information, special ad sales revenue growth CAGR 2014 - 2018 1283 ENTERTAINMENT | MONETIZATION – PRODUCTS
SMART REACH FURTHER INCREASING MONETIZATION
TOTAL REACH SMART REACH
ADD. TV DIGITAL
SMART REACH
+ INVENTORY ~20% ~100%
OF TV DEVICES IN OF P7S1 DIGITAL
HOUSEHOLDS IN 20191) INVENTORY IN 20191)
ADDRESSING TOTAL ADDRESSING
AUDIENCES BASED INDIVIDUAL AUDIENCES
ON E.G., SPECIAL BASED ON DATA
TARGET GROUPS INSIGHTS E.G.,
Age
SocioDem GEO Purchase intent
MONETIZATION ~2.5X ~1.5X
UPLIFT NET CPM VS. NET CPM VS.
CLASSIC TV SPOTS2) NON-DATA ADS3)
+
CROSS-DEVICE
DATA
ACCESS TO NEW BUDGETS AND CLIENTS
DATA COOPS
1) Add. TV: Based on 61M TV devices in German households of which 12M are connected HbbTV devices; Digital: Internal planning by SevenOne Media
2) Internal pricing analysis based on 30 second TV spot length; 3) Internal pricing analysis comparing avg. CPM of digital video ad with avg. mark-up for data ad (bookable via programmatic) 1293 ENTERTAINMENT | MONETIZATION – PRODUCTS
ACCESS TO HUGE BUDGETS AND NEW CLIENT SEGMENTS
BUDGETS [EUR] 1) CLIENTS
~5.9BN MARKET POTENTIAL EXISTING NEW BUSINESS
~3.3BN ~1.7BN ~0.9BN MEDIUM-SIZED
PERFORMANCE
- DRIVEN
DECENTRAL SMALL
BRANDS NATIONAL +
DECENTRAL &
LOCAL
1) Internal company estimate for 2017, based on Nielsen data and Magna Global data
1303 ENTERTAINMENT | MONETIZATION – PRODUCTS
ADDRESSABLE TV SMART REACH PORTFOLIO TODAY
SWITCH-INS ADDRESSABLE TV SPOT
GEO
TARGETING TARGETED
BEHAVIORAL AUDIENCE
TARGETING
GENERATION 50+
AUDIENCE
TARGETING
RE-
TARGETING
FAMILY WITH KIDS SINGLE HH
~12M DEVICES 453M >270 ~5M DEVICES 1ST BETA >20
REACHABLE CONTACTS/ CAMPAIGNS REACHABLE CAMPAIGN IN JULY CAMPAIGNS
WITH HBBTV1) MONTH1) IN 20182) WITH HBBTV 1.51) WITH TARGETING3) SINCE SEPT 20182)
Sell-out3 ENTERTAINMENT | MONETIZATION – PRODUCTS
ADDRESSABLE TV PRODUCT EXAMPLES
HOUSEHOLD TARGETING TV CAMPAIGN OPTIMIZATION
MALE SINGLE HH FEMALE SINGLE HH TV SPOT ADD. TV SWITCH-IN
+
+26% +41% +20% +30% +77%
UPLIFT IN CTR VS. UPLIFT IN CTR VS. CONTACT INCREMENTAL INCREASE IN AD
NON-TARGETED1) NON-TARGETED1) INTENSIFICATION2) REACH2) AWARENSS2)
TARGETED ADS & VISUALS MORE CAMPAIGN CONTACTS
INCREASING CAMPAIGN PERFORMANCE INCREASING CAMPAIGN PERFORMANCE
1) Single household targeting campaign, CTR = click through rate on microsite; 2) Programmatic retargeting campaign, ad awareness = aided ad awareness
1323 ENTERTAINMENT | MONETIZATION – PRODUCTS EXAMPLES
OUR UPDATED DIGITAL SMART REACH PORTFOLIO
SALES APP FOR DATA-DRIVEN VIDEO PERFORMANCE DATA-DRIVEN PERFORMANCE-
REGIONAL PROMOS CAMPAIGNS RETAIL MEDIA INFLUENCER ADS DRIVEN SOCIAL MEDIA
+ NEW NEW NEW
~2M ~900M >80 >8K >200
app downloads1) VVs/month1) online shops1) influencers1) clients1)
EUR ~1.8BN EUR ~8.8BN
FREESHEETS MARKET3) PERFORMANCE MARKET2)
1) Internal information; 2) Magna Global June 2018, total performance market representing full market potential as P7S1 participates in full market with key assets and technology
3) Magna Global June 2018, non-digital freesheets market representing full market potential as increasingly replaced by digital freesheets market 1334 ENTERTAINMENT | MONETIZATION – ENABLERS
STRONG KEY TECH ENABLERS
PERFORMANCE TECHNOLOGY ADVERTISING TECHNOLOGY
> LARGEST PERFORMANCE AGENCY FOR SOCIAL IN GERMANY1)
ATTRI- AD-
> ACCESS TO ALL PLATFORMS & PROGRAMMATIC INVENTORY
DSP DMP SSP
BUTION SERVER
> TECHNOLOGY FOR KPI-DRIVEN SOLUTIONS FOR ALL P7S1 MEDIA
2018 2019
VIDEO & DISPLAY > OWN INDEPENDENT AD TECH STACK
FOCUS ON
SOCIAL MEDIA
+ ADDRESSABLE
TV
> GDPR COMPLIANT & TRANSPARENT ACROSS VALUE CHAIN
> FOCUS ON PREMIUM VIDEO & ADDRESSABLE TV
INFLUENCERS
CORE ENABLERS FOR ADDRESSABLE, PROGRAMMATIC & BIDDABLE SMART REACH
1) No comparable full service agency with similarly large client base and media volume for Social Performance Media in Germany existing
Source: esome market analysis 1345 ENTERTAINMENT | MONETIZATION – ENABLERS
YIELD MANAGEMENT VIA 4 KEY LEVERS
PROGRAMMATIC TRADING SMARTER PRICING
PROGRAMMATIC PROGRAMMATIC OPTIMIZE PERFORMANCE VALUE
GUARANTEED AUCTIONING
EFFECTIVE TARGET-
NET CPM
GROWTH + PERFORMANCE
-BASED TV + GROUP
PRICING
+2-3%1) +15-302) +10%3)
FIXED PRICE BIDDING
BETTER P.A. POTENTIAL P.A. ON TOP BOOKINGS
MONETIZATION
INVENTORY MANAGEMENT ADVANCED ANALYTICS
AD SERVER NEW BOOKING
MEASURABILITY
UPGRADE INTERFACES
DATA INSIGHTS DATA-DRIVEN SOLUTIONS
TECH-OPTIMIZED
ON DEMAND,
MATCHING OF
PERFORMANCE
DEMAND & SUPPLY
& PRICING
CROSS-MEDIA ATTRIBUTION
1) Internal SevenOne Media estimate for potential price increase per year; 2) Internal SevenOne Media estimate in EUR M ad sales revenues per year
3) Representative client example: on top-booking in % of commitments realized via target-group pricing approach 1356 ENTERTAINMENT | MONETIZATION – ENABLERS
SALES SET-UP COVERING ALL BUDGETS AND CLIENTS
EXISTING
+ NEW
MID- DECENTRAL INTERNATIONAL
NATIONAL NATIONAL
SIZED & LOCAL START
CLIENTS START UPS
CLIENTS CLIENTS UPS
BRANDING
BUDGETS
+
PERFORMANCE
BUDGETS
+
SALES
BUDGETS
136ENTERTAINMENT | MONETIZATION
CLEAR PLAN FOR STRONG FUTURE GROWTH
AD PRODUCTS 1-3% CAGR 1) defined as growth potential
1 TOTAL REACH
360° MONETIZATION
2
OF VALUE CHAIN
3 SMART REACH
ENABLERS
4 TECHNOLOGY
5 YIELD MANAGEMENT
2018 TV & Digital DOOH Digital Perfor- 2023E
6 SALES ORGANIZATION Add. TV Video Freesheets mance
1) Internal company estimate
137ENTERTAINMENT I MONETIZATION – AD SALES
KEY ACTIONS EXECUTED BY 2019
TOTAL REACH AND SMART REACH
▪ DIGITAL 3RD PARTY INVENTORY EXTENDED BY 5 NEW PARTNERS
WITH MORE THAN 30 PLATFORMS – H1 2019
▪ 100% OF SWITCH-INS PROGRAMMATIC & BIDDABLE – H1 2019
▪ PROGRAMMATIC ADDRESSABLE TV SPOTS – H2 2019
▪ ROADSHOW TO KEY ADVERTISING CLIENTS TO MARKET SALES STRATEGY
STILL IN 2018
TECH ENABLERS AND INVENTORY MANAGEMENT
▪ TECH SYNERGIES WITH ESOME FOR SOCIAL, VIDEO & DISPLAY – 2018/
ADDRESSABLE TV – H1 2019
▪ SCALING OF VIRTUAL MINDS TECHNOLOGY FOCUSING ON VIDEO &
ADDRESSABLE TV – H2 2019
▪ FULL LAUNCH OF CROSS-DEVICE BRIDGE – H1 2019
▪ UPGRADE OF DIGITAL BOOKING TOOL AND AD SERVER TO OPTIMIZE
SELL-OUT – H1 2019
ORGANIZATION
▪ BUILD ONE INTEGRATED SALES ORGANIZATION FOR BOTH TV AND DIGITAL
GERMANY´S NEXT TOPMODEL
E3
© ProSieben/Willi WeberCAPITAL MARKETS DAY – NOVEMBER 14, 2018
ENTERTAINMENT
DISTRIBUTION & DATA
CONRAD ALBERTENTERTAINMENT | MONETIZATION
GROWING TOTAL MONETIZATION
ADVERTISING + DISTRIBUTION + SUBSCRIPTION
B2B business B2C business
B2B business driven
driven by driven by
by TV and digital
commitments subscribers of
ad revenues
of partners OTT platform
139ENTERTAINMENT | MONETIZATION – DISTRIBUTION/SUBSCRIPTION
DISTRIBUTION BUSINESS WITH GROWTH AND STABILITY
HD FTA SUBSCRIBER DEVELOPMENT [IN M]1)
9.2
8.4
6.9 9.2M
2018 target achieved
6.0
5.1
3.9
2.3
24%
HD penetration2)
Q3 2012 Q3 2013 Q3 2014 Q3 2015 Q3 2016 Q3 2017 Q3 2018
1) Based on Distribution partner reports
2) HD penetration based on Astra monitor report 2017, TV households: 39M 140ENTERTAINMENT | MONETIZATION – DISTRIBUTION/SUBSCRIPTION
FULL COVERAGE ON ALL DISTRIBUTION CHANNELS
TRADITIONAL DISTRIBUTION PARTNERS DIGITAL DISTRIBUTION PARTNERS
SECURE REACH AND DRIVE HD PENETRATION EXTEND REACH AND ACCESS NEW REVENUE SOURCES
17.4M HH1) 17.5M HH1) 3.1M HH1) 2.5M HH1)
Satellite Cable IPTV Terrestrial OTT/ Phones/ Connected Streaming
DVB-T2 Mobile tablets Smart TVs devices
New New New New
Player Player Player Player
Ambition level: 10M users
with direct impact on
distribution revenues
Note: HH = households
1) “Digitalisierungsbericht Video” August 2018 141ENTERTAINMENT | MONETIZATION – DISTRIBUTION/SUBSCRIPTION
CONTINUOUS DISTRIBUTION REVENUE GROWTH
DISTRIBUTION REVENUES MARKET TRENDS AND GROWTH LEVERS
[IN EUR M]1) DISTRIBUTION BUSINESS WILL CONTINUE TO BENEFIT FROM DIGITIZATION
HD & PayTV Competition in the satellite, IPTV, and OTT market
+17% Uplift with increased HD and PayTV penetration
CAGR 2012-2018
140
133 New Upside potential due to attractive offers with NPVR,
TV functions Time Shift and Instant Restart
109 113
92
Increasing demand for UHD content distribution
74 UHD strengthened by already 7M UHD devices2) in market
55
DTH SD Acceleration of HD and UHD adoption through
SWITCH-OFF3) potential SD-switch-off in 20203)
Increased demand for OTT offerings through 99%
2012 2013 2014 2015 2016 2017 Q3 2018 5G 5G population coverage by 20254)
LTM1)
1) Distribution DE/AT/CH w/o ad revenues; 2) UHD devices as of Q1 2018, source: GfK, gfu; 3) As per announcement of ARD & ZDF, PSB aim for DTH SD switch off in 2020;
4) Target announced by Deutsche Telekom 142ENTERTAINMENT | MONETIZATION – DATA
BECOMING A DATA SCIENCE DRIVEN ORGANIZATION
OUR MISSION OUR EXECUTION APPROACH
Build a data-driven
consumer insights
▪ Build a unified and central consumer data ecosystem
framework to enable a CONSUMER entailing a central and unique ID for each user to support
true end-to-end DATA
a heterogenous stakeholder landscape
entertainment value UNIVERSE
proposition Monetization Reach ▪ Provide data science capabilities, a scalable data
organization and operating model to ensure data-driven
product and services
▪ Be innovative, fast and unlock never seen insights by
connecting B2B, B2C and content data
Our ultimate aim is to understand consumers in every day
situations, predict next day interests and ensure a precise
personalized end-to-end entertainment experience
BE RELEVANT WITH THE RELEVANT CONTENT AT THE RIGHT TIME
143ENTERTAINMENT | MONETIZATION – DATA
DATA DEEP-DIVE: NETID
STATUS QUO NOVEMBER 2018
▪ 35M POTENTIAL USERS READY TO REGISTER
AND/OR LOGIN ON OUR SITES
▪ >60 PARTNERS FROM MEDIA & PUBLISHING AND
SUCCESSFUL LAUNCH OF SINGLE SIGN-ON ALLIANCE ON ECOMMERCE SIGNED UP ALREADY
OCTOBER 23, 2018
▪ FIRST SINGLE SIGN-ON WITH FULL GDPR AND
E-PRIVACY COMPLIANCE
BENEFITS
▪ IMPROVE CONSUMER CONVENIENCE TO
REGISTER & LOGIN ON OUR SITES
NETID PARTIES1)
▪ JOINTLY COLLECT UP TO 65M OPT-INS WITH
FOUNDERS
PARTNERS AND BENEFIT FROM NETWORK
EFFECT
▪ IMPROVE CONVERSION, DATA REACH &
35M QUALITY AND ENABLE DATA SHARING WITH
POTENTIAL PARTNERS
USERS2)
▪ IMPORTANT STEP TOWARDS BECOMING A DATA
SCIENCE DRIVEN BUSINESS
1) Examples, not exhaustive; 2) Number of registered users on founders’ and netID partners’ platforms,
having access to use the netID service as of October 2018 144ENTERTAINMENT | MONETIZATION – DATA
DATA DEEP-DIVE: NETID
UNIFIED SINGLE SIGN-ON REGISTRATION 3
2 4
1 5
EASY AND CONVENIENT LOGIN PROCESS
145ENTERTAINMENT I MONETIZATON – DISTRIBUTION & DATA
KEY ACTIONS EXECUTED BY 2019
DISTRIBUTION
▪ EXTEND 4 MAJOR DISTRIBUTION DEALS FOCUSED ON HD, PAY TV AND NEW
RIGHTS INCL. DEAL VALUE INCREASE, CLOSE 4 OTT DISTRIBUTION DEALS
▪ GROW NATIVE UHD CONTENT TO >70 HOURS TO PUSH PREMIUM CONTENT
EXPERIENCE
DATA
▪ CONNECT OFFLINE & ONLINE DATA TO BUILD A UNIFIED AND CENTRAL
CONSUMER DATA ECOSYSTEM AS NUCLEUS FOR ALL FUTURE DATA
SCIENCE DRIVEN PRODUCTS AND INSIGHTS BY END OF Q2 2019
▪ ROLL OUT NETID TO UP TO 200 PARTNERS (FULLY COMPLIANT WITH
UPCOMING E-PRIVACY REGULATION)
▪ DEVELOP NEW PREDICTION MODEL FOR AGE/GENDER BASED AD TARGETING
PRODUCTS, ENABLING BEST-IN-CLASS PREDICTION ACCURACY BY Q2 2019
▪ AUTOMATE DATA SCIENCE DRIVEN INTEREST AND CONSUMER
TARGETING PRODUCTS BY Q3 2019
GERMANY´S NEXT TOPMODEL
E4
© ProSieben/Willi WeberThis presentation contains "forward-looking statements" regarding
ProSiebenSat.1 Media SE ("ProSiebenSat.1") or ProSiebenSat.1 Group,
including opinions, estimates and projections regarding
ProSiebenSat.1's or ProSiebenSat.1 Group's financial position, business
strategy, plans and objectives of management and future operations.
Such forward-looking statements involve known and unknown risks,
uncertainties and other important factors that could cause the actual
results, performance or achievements of ProSiebenSat.1 or
ProSiebenSat.1 Group to be materially different from future results,
DISCLAIMER
performance or achievements expressed or implied by such forward-
looking statements. These forward-looking statements speak only as of
the date of this presentation and are based on numerous assumptions
which may or may not prove to be correct.
No representation or warranty, expressed or implied, is made by
ProSiebenSat.1 with respect to the fairness, completeness, correctness,
reasonableness or accuracy of any information and opinions contained
herein. The information in this presentation is subject to change
without notice, it may be incomplete or condensed, and it may not
contain all material information concerning ProSiebenSat.1 or
ProSiebenSat.1 Group. ProSiebenSat.1 undertakes no obligation to
publicly update or revise any forward-looking statements or other
information stated herein, whether as a result of new information,
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