While Germany’s pay TV market remains one of the toughest in Europe, there are definite signs of improvement at leading player Sky Deutschland as well as growing opportunities for U.S. majors in the burgeoning sector.
Pay TV operators face a market saturated with some 35 free TV channels and high license fees, which have relegated feevee to less than 10% of the total 34 million German TV households.
Yet at loss-making Sky, Germany’s main nationwide pay TV provider, figures have been slowly improving. Sky increased its number of subscribers by 183,000 last year to 2.65 million. The increase in subscriptions and higher advertising income resulted in a revenue boost of more than $100 million to $1.38 billion for Sky, which also saw its loss narrow by 40% to $577.65 million.
Sullivan adds that Sky’s focus remains the expansion of “services that will genuinely differentiate Sky, and build our leadership as the most innovative TV provider in Germany and Austria.”
Sky has continued to introduce innovations and recently extended its Sky HD service with new channels, including Germany and Austria’s first 3D offering. The paybox is also set to launch Sky Sport News HD, a fully dedicated 24/7 sport news channel.
Sky is hiring more than 100 employees for the new outlet — and borrowing $68 million from parent News Corp. for the ambitious project.
The feevee operator, which more than doubled its HD penetration to 593,000 subscribers last year, also plans to expand its HD offering by adding channels during 2011.
Sky has sought to increase its reach by inking cooperation agreements with telco giant Deutsche Telekom and regional cable providers to distribute the full Sky service via local cable networks. Most recently it expanded its existing pact with cabler Tele Columbus, making Sky packages available as part of Tele Columbus’ new offering that bundles Internet, telephone, a basic digital TV package as well as the Sky Welt package plus one Sky Premium package (film, sports or Bundesliga soccer).
The deal with Tele Columbus enables Sky to “reach even more consumers via the cable network,” says Sky’s distribution chief Holger Ensslin.
Other players also see greater opportunities in Germany’s TV market.
NBCUniversal Global Networks Deutschland operates four pay channels in Germany, Austria and Switzerland, including the recently re-launched 13th Street and Syfy. It also operates History and the Biography Channel as joint ventures with A&E.
NBCU revamped 13th Street, giving the crime and thriller channel a new lineup with series and films such as “Shattered” (airing exclusively) and “Rookie Blue” as well as “Crossing Jordan,” “Navy CIS” and “Flashpoint.”
NBC U’s pay channels are available on Sky as well as on regional cablers, plus Deutsche Telekom’s IPTV T-Home offering and Eutelsat’s cable platform Kabelkiosk.
Deutsche Telekom has expanded its HD offering this year, including high-def fare from Syfy, TNT and Sony’s AXN.
TNT Serie, one of five channels operated by Turner Broadcasting System in Germany, has recently bolstered its lineup with HBO’s “Boardwalk Empire” and this summer will premiere Steven Spielberg’s alien invasion skein “Falling Skies.”
Free TV broadcaster ProSiebenSat.1 is set to launch a pay TV channel this year, ProSieben Comedy. ProSiebenSat.1 and rival RTL already operate a slew of niche pay outlets, including Sat.1 Comedy and Kabel Eins Classics as well as RTL Crime, RTL Living and Passion.
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Mip TV 2011