ProSiebenSat.1 Media AG is the holding company of the ProSiebenSat.1 Group. It is an incorporated company with its headquarters in Germany. As such, ProSiebenSat.1 Media AG is subject to German law particularly with regards to the provisions of German legislation governing stock corporations, co-determination, and the capital markets.
In its function as the Group holding company, ProSiebenSat.1 Media AG has no operational role. Its tasks include central financing, Group risk management and the ongoing development of the corporate strategy. The economic development of the ProSiebenSat.1 Group is determined primarily by the subsidiaries held both directly and indirectly.
One of the most important direct subsidiaries of ProSiebenSat.1 Media AG is ProSiebenSat.1 TV Deutschland GmbH. Under this umbrella all German TV stations work together in a cross-function matrix organization. In terms of structure, ProSiebenSat.1 Media AG differs considerably from other German TV companies. Not only does the company own all shares in the TV stations SAT.1, ProSieben, kabel eins and six and SAT.1 Gold (since January 2013), it also indirectly holds a 100 % stake in the sales companies. This results in advantages with regard to the station programming and the sale of advertising time.
The companies in the online, games and pay TV areas are also affiliated with ProSiebenSat.1 Media AG via subsidiaries consolidated under ProSiebenSat.1 Digital GmbH, SevenSenses GmbH as well as SevenVentures GmbH.
ProSiebenSat.1 Media AG organizes its business activities into three segments:
1. Segment: Broadcasting German-speaking
The four German stations (SAT.1, ProSieben, kabel eins, and sixx) as well as the stations of our subsidiaries in Austria and Switzerland are consolidated in the Broadcasting German-speaking region. In addition, this segment includes ProSiebenSat.1 Produktion, SAT.1 regional companies, and the SevenOne Media marketing company.
3. Segment: Content Production & Global Sales
The Content Production & Global Sales segment covers the international program production and distribution business. The two units are bundled under the Red Arrow Entertainment Group. In 2012, the Group expanded its investment portfolio, primarily in key English-speaking markets. In Great Britain, Red Arrow acquired majority stakes in the production companies CPL, Endor Productions and NERD in spring. This was followed by an interest in the New York production company Left/Right in August. As a result the Group now has a very good positioning for both fiction and non-fiction production, holding a portfolio with 18 majority stakes in nine countries. In 2012, the Group also opened a permanent sales office in Hong Kong, using it as a base for covering the entire Asian market. With the Red Arrow Entertainment Group, the Group participates in the entire TV value chain, from development and production to selling television programs. One successful example is the TV show "The Taste". It was developed in 2012 by the American Red Arrow subsidiary Kinetic Content and is also produced locally by Kinetic for the US station ABC. Red Arrow International, the program distribution subsidiary, owns the global sales rights and has sold licenses not only in the USA but also to Canada, India and Australia.
2. Segment: Digital & Adjacent
The Digital & Adjacent segment is the strongest growth driver of the ProSiebenSat.1 Group. It bundles the business pillars Online Video, Online Games, Ventures & Commerce and Music. The Group leverages the reach and advertising power of its television stations to develop products from the digital sphere and adjacent business areas as successful and strong brands. In this way, the Group taps into new revenue sources and strengthens its independence from TV advertising markets which are sensitive to the development of the general economy.
maxdome, Germany's largest video-on-demand platform is part of the ProSiebenSat.1 Group. maxdome offers subscribers more than 50,000 series, movies, comedy programs, documentaries and other genres. Furthermore, the Group operates an advertising-financed online network with 25 million unique users per month, and with websites such as MyVideo has established online brands with high levels of recognition.
Another important area of growth is the Online Games business. In 2012, among other things, the ProSiebenSat.1 Group secured Europe-wide exclusive licenses to eight blockbuster games from the US games developer Sony Online Entertainment. For international marketing of its online games portfolio, the Group agreed several media cooperations, including those with TF1 in France and the Turkish Dogan Media Group. In the Online Games unit, ProSiebenSat.1 generates most of its revenues on the basis of what is called "virtual item selling", where players acquire virtual goods for their online games.
The ProSiebenSat.1 Group also expanded its Ventures business in 2012. With its media-for-revenues/ media-for-equity business model, the Group has built up a portfolio with over 50 partnerships including strategic investments over the last few years. In doing so, the Group provides media services to promising start-up companies and receives a revenue and/ or equity participation in return.
Furthermore, revenues from the Music business developed in an extremely positive way in 2012. Starwatch Entertainment GmbH is ProSiebenSat.1´s music label, which has successful artists such as Lenny Kravitz, Roxette and a-ha under contract. In addition to the classical music business, the company's portfolio includes live entertainment and marketing artists.