In Conversation with Seven.One Entertainment Group’s Henrik Pabst

Last November, the German media company ProSiebenSat.1 reorganized its production and distribution businesses. It formed Seven.One Studios, which encompasses eight subsidiaries in Germany, the U.K., Denmark and Israel—known for formats like Married at First Sight and scripted series like Vienna Blood—along with the global sales outfit Red Arrow Studios International. Henrik Pabst, the chief content officer of the Seven.One Entertainment Group, was named managing director of Seven.One Studios. Pabst explains the rationale for the realignment, the focus on German content while not abandoning U.S. films and TV series, and stresses the urgent need to deal with rising production costs.

WS: How and why did Seven.One Studios come about?
PABST: We established Seven.One Studios as our new production umbrella last November, bringing together all our production subsidiaries in Germany, the U.K., Denmark and Israel, and our worldwide distribution arm. With the growing demand for local programming, Seven.One Studios is producing across all our platforms and for the external market.

WS: Seven.One Studios sold the U.S. production companies it owned to Peter Chernin’s The North Road Company. Why was that move necessary?
PABST: Our entertainment strategy today is primarily local and focused on the German market. The U.S. companies were no longer able to contribute to that strategically. That’s why we decided that we were no longer the best owners of these companies. They were part of a different strategy at a different time, but also a great time!

WS: As ProSiebenSat.1 has transitioned from being a traditional linear television business to operating multiple linear and nonlinear platforms, what is the strategy today for offering content and reaching viewers?
PABST: Our strategy is best illustrated by a triangle: We have our linear platforms, a strong AVOD offering and an exclusive SVOD offering. Within this triangle, we play our programs always with the goal of maximum reach and the best monetization. Having flexibility here is key to us. We recently announced a major partnership with NBCUniversal, granting the rights we need within that triangle.

WS: Many people believe AVOD is the future of the business. Is AVOD a primary way you are monetizing content?
PABST: We strongly believe in advertising. Our in-house media marketer, Seven.One Media, is the largest, strongest and most innovative sales organization in the German market. Ad-supported content is here to stay, and with Joyn, we have a well-established streaming platform with a clear focus on AVOD. We also have the right ad-tech solution tools across the ecosystem to meet the needs of our advertisers. And let’s not forget that people are used to watching ad breaks. The strategy shift from some global players toward AVOD is a clear sign that the strategic approach we started with the setup of Joyn was the right one.

WS: Do viewers watch different types of content on the group’s linear and nonlinear platforms?
PABST: Some content is better suited to linear, be it magazines, news, infotainment or certain kinds of entertainment shows. The more niche and younger the content, the consumption is primarily on VOD with no fit on the linear broadcast. But a huge range of content works well in both worlds, such as reality, scripted and factual programming. Some of the bigger entertainment shows are platform-agnostic, and we see great total numbers [of viewers] and growth. The brands are more important than the platform.
WS: When we last spoke, Seven.One Entertainment was emphasizing local programming in its schedules. Has that strategy paid off?
PABST: It’s been a journey, but we have steadily increased our local share on our main channels in prime time and will continue with that. We have also invested in our own news offering that we have been producing in-house since the beginning of this year, and we have steadily increased our volume in relevant programming. But licensed [programming] still plays a role for us and [makes up] a big volume in the grids. And we have seen good numbers across our platforms for features and series.

WS: How are you finding and nurturing young talent?
PABST: To remain attractive to a young audience, young talent is crucial. So, the question is: How can you, as a media company, be attractive to young producers and creators? One example: More than a year ago, we got in touch with a group of very creative people, a young production company called Kleine Brüder (Little Brothers). They are extremely talented and creative people with fresh ideas—and more importantly, they are close to communities and audiences we can hardly reach these days. We have brought them together with our scripted company Pyjama Pictures. The results so far have been highly encouraging. Together, they have created a huge hit for Prime Video in Germany, Die Discounter, a young mockumentary going into its third season. Another format is the comedy Intimate, which premiered on Joyn and then on our free-TV channel ProSieben.
Finding ways to connect young talent to our classic production business will be one of the growth areas of Seven.One Studios, as we also see a clear shift in budgets on all fronts toward younger content.

WS: I imagine they can produce at lower costs.
PABST: I am not sure that they produce cheaper in general. But they are more flexible and open to looking at the system with a fresh and new approach, which can lead to lower costs. We all must look even closer at production costs nowadays and find new and more efficient ways to produce.

WS: What are the advantages of ProSiebenSat.1 fully owning Joyn?
PABST: Since the end of last year, Joyn has been wholly owned by ProSiebenSat.1. They are now part of the Seven.One Entertainment Group and the center of our digital ecosystem. Full ownership leads to many advantages and synergies, such as, for example, a much more integrated windowing and content strategy.

WS: What can you tell us about the deal with NBCUniversal?
PABST: NBCUniversal [worked] with the RTL Group for more than 20 years. We now have a deal that is groundbreaking for our future content acquisition. For the first time with a major studio, we have the flexibility to choose the order in which we release the strong content—whether first on linear TV, AVOD or SVOD, or Joyn. Classic TV and on-demand will benefit from this approach. We can ensure that their content reaches the widest possible audience.

WS: What are your priorities as you look ahead for 12 to 24 months?
PABST: For the Seven.One Entertainment Group, we will continue the transformation to a platform-agnostic content organization. For Seven.One Studios, we will continue to grow our group in a disciplined and gradual way with the right balance between M&A and organic growth.