Exclusive Interview: ProSiebenSat.1’s Andreas Bartl

PREMIUM: Andreas Bartl, the chief German TV officer at ProSiebenSat.1 Media, talks to World Screen Newsflash about the power of linear channels, the success of the online VOD platform maxdome and the company’s relationship with the Hollywood studios.

ProSiebenSat.1 Media’s maxdome is Germany’s largest video-download site. It offers consumers more than 35,000 titles ranging from feature films, series and comedy shows to sports, music and cartoons. As Andreas Bartl explains, the key to maxdome’s success is the variety of ways in which viewers can access its content.

WS: What opportunities are you finding in digital media, whether it’s online or mobile or tablets?
BARTL: TV and online are going well together, especially in the field of streaming video online. The online advertising business is growing dynamically in Germany, and we are number one here with revenues. So I think we are well prepared for a future in which hybrid television will give a new push to the on-demand use of TV content. We not only have advertising-supported content online, most of our programming is available in a seven-day catch-up window to view it again, or view it because you had missed it or heard about it. We also have subscription video on demand and we are very well positioned here for the age of hybrid television with our platform maxdome, which is the number one video-on-demand online platform in Germany. We are expecting a big push by the hybrid television sets that make it much more convenient to watch your content on-demand on your wide-screen TV set.

So online advertising, subscription income and pay-per-view income from video-on-demand use is a vital part of our digital strategy. And the other part is the online games business. This is also a dynamically growing market, not only in Germany, but worldwide. We recently acquired burda:ic, which is one of the leading European publishers of free online games. We want to invest and grow here as well.

WS: Last January, ProSiebenSat.1 took full control of the online VOD platform maxdome. What prompted this investment and what has made maxdome so successful?
BARTL: From a strategic point of view it’s a very important asset, so we wanted to take full control of it in order to take our next steps with maxdome. The business looks very good, the churn rate is much better and we have been able to attract a lot of new clients. We definitely think that TV content on demand will be much more popular in a couple of years, so this is why we chose to acquire the full company.

WS: Maxdome offers viewers download-for-rental, purchase and subscription models. Which is proving to be the most popular?
BARTL: Well, the good news is that all three options seem to be popular. This is also part of our strategy: we give our viewers the full freedom for how to use maxdome because there are different types of customers—some don’t like subscriptions, some are cash-and-carry clients and have the possibility to pay per view, and some want to subscribe. It depends on how much convenience you want and how much business you want to have with maxdome, and our clients are using this freedom. But the most popular transaction is subscription.

WS: How is your relationship with the Hollywood studios and other distributors?
BARTL: Very good. We have been working with most of the Hollywood studios for 20 years doing deals, and of course we are discussing with them the issue of using content on demand. They have an interest in exploring the possibilities, so we have found some good agreements. This led to a very good stock of programming we can offer on maxdome. The attractiveness of our wide range of programming has led to the market positioning we have with maxdome. It’s very important. But the Hollywood studios are open to discussions, so it’s going hand in hand.

WS: You did some quite innovative deals some years ago when Disney allowed episodes of Lost, Desperate Housewives and Grey’s Anatomy to air first on maxdome, even before they aired on your linear channels.
BARTL: Yes, for an extra amount of money episodes have been available on maxdome before their run on regular television, so if you were really interested in Lost and could not wait until the following week for the next episode, we did some good business with this. It worked pretty well. Lost was not such a big success in Germany in free-to-air television. But if you have a series that is the hit of the year, it’s a model that is very interesting for both television and online.

WS: So the big hit shows on linear TV are also the ones that are popular on maxdome?
BARTL: Definitely, there is a very close relationship. Free TV makes the brands, makes the series popular, and then you can use them online very, very well. Good old television is still the gatekeeper in building brands.

WS: Some television executives think eventually there may be more viewing on demand than watching linear channels.
BARTL: Nobody knows about the future. I don’t think on-demand television will make linear television obsolete because watching linear TV is a kind of social experience of millions of people watching the same event at one time—it gives people things to talk about. For me, linear television is a vital force of society, so I think it will be the leading medium for years. But definitely on-demand use of television content will grow, especially by the distribution of new technologies like tablets and also hybrid television. If you can run your online content on television sets it will be a big step for on-demand television. The good news is that so far there has hardly been any cannibalization of linear channels by on-demand viewing. In fact, on-demand seems to be even strengthening the loyalty of viewers to a certain show if they know they will not miss an episode—especially for shows that are serialized and where missing an episode means you lose track of what’s going on with the series. I think on-demand television and linear television will have a very good and fruitful relationship and will stimulate each other for years.

WS: What factors contributed to the company’s good financial performance?
BARTL: There were two main factors. First, it’s the market—TV-advertising spending is rising in Germany, driven by the overall bright economic situation. Second, it’s the perfor­mance of our TV channels. We had a very strong second quarter, and our channels have a combined market share of 29.2 percent, which is pretty high compared to previous years, so it is looking good in Germany.

WS: Has your media-for-revenue-share strategy, which gives commercial spots to companies that have not traditionally advertised on TV in exchange for a share in the company’s revenues, also helped your financial performance?
BARTL: Yes, it’s a way of using our commercial time that is not used by classic advertising spending. We bring new customers to television advertising by helping them over the hurdle, and we have built up a portfolio of 25 promising companies. It’s a very good addition to the [traditional] advertising income.

WS: Outside of Germany, which territories and channels are performing well?
BARTL: Nordic is doing very well. Our Scandinavian channels—Sweden, Norway and Finland—are really performing very well in viewing share and also in revenues. So it’s looking bright and promising for the rest of the year. But the financial results of our channels in Eastern Europe are influenced by the overall economic situation of Hungary and Romania. Compared to what the whole advertising market delivers, the channels are doing well, but given the overall situation, they are below last year.

WS: Tell us about the objectives at Red Arrow and SevenOne International.
BARTL: The idea behind Red Arrow is to build up a network of very talented producers all over the world in order to get the best content available for us first, and for our channels, because at the end of the day, it’s all about content, so we are all working to have the best programming available for Germany and concentrated in Europe. We did a couple of deals recently with international producers and we are now represented in most of the key markets and we have plans to expand further. The formats that Red Arrow creates are not only available to our channels, but we sell them around the world, and this generates revenues for SevenOne International, which is doing very well. Production and distribution have therefore become vital pillars of our strategy, and we want to expand it.