VOD, online advertising boost business

BERLIN

Pan-European broadcasting group ProSiebenSat.1’s core business is expanding rapidly with ancillary operations, including VOD and online advertising, becoming increasingly significant to the group’s bottom line.

The Munich-based conglom posted a third-quarter increase in revenue of 7.1% to €636.9 million ($811.3 million). Net profit more than doubled to $82.98 million from the same period last year.

ProSiebenSat.1’s revenue and earnings continued to climb in the first nine months of the year, with sales up 6% to $2.54 billion and net income rising 58.5% to $307 million.

While free TV has long been ProSiebenSat.1’s focus, its Digital & Adjacent arm has become the strongest growth driver, upping third-quarter revenue by 50% to $109.4 million. Digital & Adjacent bundles Maxdome (Germany’s biggest VOD portal), its online video advertising sales business, a music unit and investment arm Ventures & Commerce.

ProSiebenSat.1 CEO Thomas Ebeling said, “In the last few years, we have consistently invested in new growth markets. This is paying off today. We are developing ProSiebenSat.1 from a traditional TV provider to a digital entertainment powerhouse — and are thus setting the course for a long-term, successful development of the group.”

In its core German-speaking territories, ProSiebenSat.1’s third-quarter revenue fell 3.2% to $498.9 million. The London Olympic Games, which aired on pubcasters ARD and ZDF this summer, lured away viewers from ProSiebenSat.1’s German TV webs.

The group’s main Teutonic channels are Sat.1, ProSieben and Kabel Eins, all of which rely on high-profile Hollywood fare like “NCIS,” “Hawaii Five-0,” “Supernatural,” “Grey’s Anatomy” and “Justified.”

ProSiebenSat.1’s Content Production & Global Sales unit, which includes production-distribution subsid Red Arrow Entertainment, reported higher revenue as sales grew by $20 million to $32.5 million. In August, Red Arrow acquired a majority stake in U.S. shingle Left/Right, the fourth acquisition in the U.S. and U.K. markets this year.

Last year ProSiebenSat.1 sold Dutch and Belgian holdings and the group is looking to sell off its TV networks and radio stations in Denmark, Sweden, Norway and Finland, which could bring as much as $1.9 billion.

While execs are tight-lipped about the sale, possible buyers reportedly include Discovery Communications as well as equity firms Providence Equity Partners and Nordic Capital.

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