 Core Business: Television
Advertising Crisis Affects Stations' Performance
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Group maintains lead in advertising market
Commercial television is the ProSiebenSat.1 Group's core business. The company's
four stations - Sat.1, ProSieben, Kabel 1 and N24 - generate 96 percent
of its revenues. Last year the market was dominated by the ongoing
recession in advertising. For the first time in modern German history, the advertising
industry's revenues were down for two years in a row. As expected,
our stations felt the impact. Nevertheless, the ProSiebenSat.1 Group
reconfirmed its lead in the advertising market in 2002. With a gross advertising
market share of 45.4 percent, the Group is Germany's clear Number
One in television advertising. Stations RTL, RTL II, Vox and Super RTL
achieved a combined gross advertising market share of 41.9 percent.
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Alongside lower spending for television advertising, television in 2002 was
also influenced by major sporting events. Live coverage of the Winter
Olympics and the World Cup brought significant gains in audience share for
the public broadcasters ARD and ZDF. By contrast, ProSieben and Sat.1 developed
weak spots over the course of the year that could not be remedied
until the fall. The ProSiebenSat.1 Group's three full-service channels achieved
a combined share of 28.1 percent in 2002 among the commercially decisive
14 to 49-year-old audience, compared to the previous year's 30.1 percent.
Among all viewers above the age of three, Sat.1, ProSieben and Kabel 1
achieved a share of 21.5 percent, following 23.1 percent in 2001. RTL, RTL
II, Vox and Super RTL lost ground as well. Their combined share of all viewers
was 24.2 percent, following the previous year's 24.7 percent.
Despite sharp cost cuts, operating earnings in the Television segment were
EUR 62 million, well down from the previous year's EUR 137 million. Total
revenues in Television were EUR 1.837 billion, equivalent to a 6 percent reduction.
Thus it appears that the ProSiebenSat.1 Group outperformed the
market as a whole: according to current industry estimates for 2002, the
total television advertising market was down between 8 and 10 percent.
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| SevenOne Intermedia |
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| Company: |
SevenOne Intermedia |
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| Legal form: |
GmbH |
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Founded:
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2002 2002 by taking over stakes
from other shareholders
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| Interest held: |
100% |
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| Type of business: |
Multimedia services |
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Main activities:
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Production and support of digital
and interactive platforms |
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| Management: |
Dr. Marcus Englert |
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Address:
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Freisinger Landstraße 74
80939 München
Tel. +49 89 32196-0
Fax +49 89 32196-578
www.sevenoneintermedia.de |
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SevenOne Intermedia: The ProSiebenSat.1 Group's multimedia
center of competence
Apart from the four stations and the marketing company SevenOne Media,
the Television segment also includes multimedia provider SevenOne Intermedia.
This company has combined all the ProSiebenSat.1 Group's multimedia
operations since the fall of 2002. As a multimedia center of competence,
SevenOne Intermedia handles a broad range of digital and interactive
platforms, from online and teletext, through added-value telephone services,
to mobile phoning and iTV. The former Kirch Intermedia GmbH became
a wholly-owned subsidiary of ProSiebenSat.1 Media AG retroactively to September
1, 2002. As of that date, the ProSiebenSat.1 Group took over the
stakes of all other shareholders - the 30.1 percent held by KirchMedia GmbH
& Co. KGaA, and the 20 percent held by Kirch Pay-TV GmbH & Co. KGaA.
The ownership reorganization became necessary after KirchMedia and Kirch-
Pay-TV declared insolvency. Kirch Intermedia was formed in 2001 by a merger
of Kirch New Media AG with ProSieben Digital Media GmbH.
Despite the rough climate for the advertising market, the company achieved
economic turnaround in 2002. With a consistent course of consolidation, and
by concentrating on the Group's Web sites and teletext pages, the company generated total revenues
of nearly EUR 50 million (not counting income from equity interests),
and showed a profit. According to standard measurements by the German advertising association IVW, in 2002 the ProSiebenSat.1 Group's Web sites -
Sat1.de, ProSieben.de, Kabel1.de, N24.de, Sport1.de, wetter.com and oktoberfest.
de - logged a total of 2.76 billion page impressions, and 192 million
visits. This represented a gain of 106 percent from 2001's 1.34 billion
page impressions. Since IVW has changed its method of measuring visits,
no comparison is possible for these. After the 2002 relaunches of the
ProSieben.de, N24.de and Kabel1.de Web sites, and the optimization of
graphics on Sat.1.de, the online marketer SevenOne Interactive capitalized
even better on the sites' improved reaches. Despite poor business conditions
in the Internet sector, marketing results were above the industry average.
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| SevenOne Media |
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| Company: |
SevenOne Media |
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| Legal form: |
GmbH |
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Founded:
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2000 by merger
MediaGruppe: 1992
Media 1: 1999 |
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| Interest held: |
100% |
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| Type of business: |
Advertising air time marketer |
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Main activities:
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Marketing advertising space on
electronic media,
research services |
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| Management: |
Peter Christmann |
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Address:
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Medienallee 9
85774 Unterföhring
Tel.+49 89 95004-0
Fax +49 89 95004-399
www.sevenOneMedia.de |
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A success even in hard times
SevenOne Media is responsible for marketing advertising time on all the
Group's stations. Last fiscal year, the marketer consistently expanded the
range of available interlinked communication concepts, and further optimized
its selling structure. These moves helped SevenOne Media successfully counter
the difficult conditions in the advertising market, and further enhanced its
market performance. SevenOne Media's good marketing performance almost
completely made up for the stations' losses in audience share. Working with
affiliates SevenOne Interactive, SevenOne Intermedia and SevenOne Club &
Shop, the company made the most of the strategic advantages of an integrated
media company to offer its clients the full range of audiovisual and interactive
platforms.
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Last year's restructuring of the selling organization improved the efficiency
of modern, integrated marketing. SevenOne Media can now serve both advertisers
and agencies from a single source. This allows it to put complex,
integrated communication concepts into action faster and more effectively,
through optimized coordination among agencies, business owners and the
marketer. Every salesperson now represents the full SevenOne Media product
portfolio. On-location salespeople in each region ensure that the company
is as close to the clientele as possible. Lines of communication are shorter
and working procedures have been optimized. To push ahead with finding
new business, a separate unit was set up to acquire clients who have not
advertised on television before.
SevenOne Media views itself as a service provider. With extensive research
activity, it prepares all necessary facts and reports to help its clients make
investment decisions about advertising online and on television. The elaborate
Adtrend study provides well-supported data for planning campaigns and
monitoring their success. The results of this fundamental study give clients
valuable information on how effective TV advertising has been in their market.
Single-source studies in cooperation with Nielsen Media Research also
provide concrete figures about the impact of TV advertising on sales. With
Emnid's semiometry system, and now that Germany's top television research
system, AGF/GfK, has included Sinus milieu target-audience information in
its television data, SevenOne Media can also offer clients the latest tools
for qualitative target-audience planning.
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