German Television, Streaming Group ProSiebenSat.1 Sees Revenues Fall by 7%, but Ramps Up Spending on Local Shows

ProSiebenSat.1 Group, which owns one of Germany’s leading broadcasters and one of its top streaming platforms, continues to feel the effects of a “challenging” economic environment, but, nevertheless, has pledged to ramp up investment in local shows.

On Thursday, the group reported revenues of Euros 3.85 billion ($4.2 billion) in the 2023 financial year, down 7% on the previous year.

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Adjusted EBITDA decreased to Euros 578 million ($629 million) from the previous year’s Euros 678 million ($739 million).

Net income amounted to minus Euros 134 million ($146 million) in 2023 compared with the previous year’s minus Euros 49 million ($53.4 million).

Adjusted net income decreased to Euros 225 million ($245 million) from the previous year’s Euros 301 million ($328 million).

In March 2023, ProSiebenSat.1 presented a new strategy that put the entertainment business and in particular streaming service Joyn at its center. Joyn had its strongest quarterly result at the end of the year: with 6.3 million monthly video users and a viewing time of 8.8 billion minutes in total, it set a new record for the platform. At the same time, AVOD revenues increased by 37%.

In order to strengthen the market share in linear TV and the growth of Joyn, ProSiebenSat.1 will focus more on exclusive local content and increase its programming expenses by around Euros 80 million ($87.2 million) this year. The group’s total programming costs will amount to around Euros 1.03 billion ($1.12 billion) in 2024, compared with the previous year’s Euros 950 million ($1.04 billion).

ProSiebenSat.1 expects advertising revenues for the entertainment segment in the German-speaking region to grow by around 2% this year.

External revenues in the entertainment segment amounted to Euros 2.57 billion ($2.81 billion) in 2023, which is a decrease of 11% on the previous year. The main reason for this was the 6% decline in advertising revenues in the German-speaking region. However, advertising revenues increased slightly year-on-year in the fourth quarter.

The sale of the U.S. production business of Red Arrow Studios in mid-2022 dented revenues in 2023. This business had contributed Euros 136 million ($148 million) to revenues in the first half of 2022. Organically, entertainment segment revenues declined by 7% or Euros 182 million ($198 million) in 2023.

Assessing the outlook for this year, ProSiebenSat.1 expects a slight growth in revenue to around Euros 3.95 billion ($4.31 billion). The group expects adjusted EBITDA to remain stable at around Euros 575 million ($627 million).

Bert Habets, CEO of ProSiebenSat.1 Group, said: “Our strategy with Joyn at the center is now starting to pay off. This is also underlined by the positive development, especially in the fourth quarter of 2023. Our goal is to further increase usage and the user base of Joyn with double-digit growth rates per year. We are firmly convinced that a free offering, centered on one platform, is the key to success.

“We are increasingly focusing on local and live content to strengthen our TV channels and scale Joyn by investing significantly more in this area in 2024. Exclusive content is the driver that will enable us to further improve the monetization of our reach – both in traditional TV and on our digital offerings. With our focus on entertainment, we also evaluate opportunities to crystalize value from our non-core assets, depending on the market environment.”

Martin Mildner, group chief financial officer of ProSiebenSat.1, said: “After a successful year-end performance, we have made a good start to the new financial year. We have set an important course for growth again in 2023. Even though the macroeconomic environment remains challenging, we expect advertising revenues in the German-speaking region to develop positively in 2024. At the same time, we want to further strengthen ProSiebenSat.1’s profitability this year and invest Euros 80 million more in local content. To this end, we will consistently continue our cash and cost management. A solid financial basis is the prerequisite for our growth.”

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