ProSiebenSat.1’s streamer Joyn reports growth, stems ad decline at German broadcast giant

ProSiebenSat.1 offices

ProSiebenSat.1’s streamer Joyn has helped to offset advertising declines at the German giant’s broadcast operations, sending shares up almost 10%.

While full-year earnings are now expected to be at the lower end of the range forecast at the beginning of the year, investors were buoyed by an improvement in the company’s performance in the second half of the year.

Advertising revenues fell by about 5% in Q3 with overall revenues dropping 3% to €888m, a smaller decline than that experienced in the first half of the year thanks in large part to growth in digital from Joyn.

Digital advertising was up by 16%, boosted mostly by Joyn and also by audio sector sales, but ProSiebenSat.1 said its earnings expectations across 2023 would be lower than hoped because of a slower than expected economic recovery in Germany.

Joyn-ed up thinking

ProSiebenSat.1 is in the midst of shifting its strategy to a digital-first business and is looking to invest upwards of €1bn ($1.05m) in programming next year that can work on both its linear networks and Joyn.

Bert Habets

Germany’s ad market has slumped around 10% in consecutive years, prompting an overhaul that saw it cut a swathe of jobs earlier this year, but CFO Martin Mildner highlighted the growth of the streamer and its potential.

Joyn’s monthly video users increased by 13% compared to the prior year to 3.8 million, Mildner said, adding that the company is working “full speed” on expanding the offering with the launch of its first FAST channels, which had attracted one million users.

The extension of Joyn to the Austrian market, meanwhile, added 400,000 monthly users to the platform in the quarter. Joyn saw its viewtime minutes increase by 1% to 6.2 billion minutes in the quarter, while Joyn’s AVOD revenues were up 58% on the prior year.

ProSiebenSat.1 posted adjusted EBITDA of €110m for the quarter, slightly up on the €108m for the prior year thanks to cost cutting. However, adjusted EBITDA for the first nine months is still tracking below that of last year.

Problems with the higher margin advertising business meant that adjusted EBITDA in the entertainment business itself declined by 7% to €85m.

While attributing the decline in ad sales to Germany’s economic problems, ProSiebenSat.1 also lost audience share in third quarter, with its family of linear channels achieving a share of 24% in the 14-49 age group, down from 25% for the prior year.

The group has adopted as strategy of focusing on locally relevant content that can be aired across linear and digital platforms, including live Bundesliga coverage on Sat.1.

ProSiebenSat.1’s dating and video businesses, which could be sold off next year, have also hit by the country’s economic woes and by changes in regulation.