In announcing its Q3 results and financial outlook, ProSiebenSat.1 revealed that it is reviewing its existing deals with U.S. studios as the group looks to increase the focus on local original programming.
Max Conze, CEO of ProSiebenSat.1 Media, said: “We are now initiating the necessary changes and investments to build a truly digital, diversified and fast growing ProSiebenSat.1. We are focusing on Entertainment that people love and commerce offers that people need. Thereby, we are consumer-centric and content and digital led. We are thus aiming to increase revenues from €4 billion to €6 billion in the mid-term—with at least half of this coming from digital. Our strong entertainment audience market shares, as well as the double-digit growth at NuCom and Red Arrow Studios, prove that we are on the right track. We have a clear growth plan and are executing it vigorously.”
ProSiebenSat.1 is looking to significantly grow revenues outside the TV advertising business. It intends to increase group revenues to €6 billion ($6.8 billion) over the next five years and adjusted EBITDA to €1.5 billion ($1.7 billion). Half of revenues are expected to come from the digital business (it is currently at 30 percent).
In order to set up a “modern and future-ready” entertainment business, ProSiebenSat.1 will invest additionally in local content, the expansion of digital platforms and an improved monetization of reach from 2019 onward. As part of the increased local focus in its entertainment content strategy, the group is currently reviewing its existing U.S. studio contracts. ProSiebenSat.1 has already inked a new licensing deal with Warner Bros.
Profit dropped by 8 percent and revenue was down by 3 percent during the first nine months of 2018, compared to the same period last year. ProSiebenSat.1 said it expects full-year revenue to drop slightly to €4 billion ($4.6 billion).
Dr. Jan Kemper, CFO of ProSiebenSat.1 Media, said: “At ProSiebenSat.1, we want to actively shape the future of the entertainment and commerce business. Therefore, adjusting our dividend policy and the associated reduced pay-out ratio are a consistent step to take. This will give us more financial headroom for important investment areas such as local content, platforms and technologies. At the same time, we want to sustainably increase the total return for our shareholders through the combination of organic growth, selective acquisitions and share buybacks.”