Group Environment

Media Political and Regulatory Environment

The German media landscape is characterized by a dual system of private and public operators. Its market structure differs considerably from other countries. This applies particularly to the TV market: Firstly, it is tightly regulated compared to other markets and advertising opportunities are significantly more restrictive compared to the US, for example, both on a quantitative and qualitative level. Secondly, public broadcasters in Germany have a high budget at their disposal since their financing is guaranteed by law. Public broadcasters are instructed to provide a “basic service to the population, including information, education, culture and entertainment,” and finance themselves with the license fee paid by every household with a television on a monthly basis. Advertising revenues are a second source of income.

In recent years, there has been a financial imbalance in the dual system since the income of public broadcasters has been increasing continuously. In 2000, the license fee was DM 28.25 or EUR 14.44 and has been EUR 17.50 per household since 2015. The fee has been standardized since January 2014 and is raised per household, regardless of the type and number of devices. Prior to this, the license fee amount was based on the number of devices. The new license fee model has led to a further increase in public broadcasters’ income from license fees. Based on the declared financial requirements of broadcasters, additional income totaling EUR 1.5 billion is forecast for the period from 2013 to 2016.

Overall, public broadcasters finance around 20 TV stations and roughly 60 radio stations with a budget of EUR 9.3 billion. Private providers operate over 400 TV stations and more than 280 radio stations. Their budget was EUR 8.4 billion in 2016.

However, private operators in Germany are competing not only with well-funded public broadcasters. The variety of offers and broadcasting methods is increasing as a result of digitalization. At the same time, competition with global providers is intensifying. ProSiebenSat.1 has a positive attitude toward this development and has identified numerous growth opportunities in this dynamic market development. Fair competition rules for all companies accompanying this digital economic transformation are a key element for successful sustainable development in this area. However, there is still an imbalance due to the special laws and regulations that ProSiebenSat.1 is subjected to in Germany as a media and broadcasting company. ProSiebenSat.1 is directly competing with global providers, such as Google or Facebook, although the latter are not bound by the same statutory provisions, for instance, with regard to the protection of young people or copyright law. In addition, there are quantitative and qualitative restrictions to the broadcasting of advertising for TV providers, which additionally impede a fair competition with digital platforms. For instance, airtime for TV advertising is restricted to a maximum of twelve minutes per hour, and a new advertising ban for regional advertising has been established for TV providers.

Politicians have recognized that changes are needed. With the Bund-Länder-Kommission zur Medienkonvergenz (Federal-State Commission on Media Conversion) at national level and the Revision of the Audiovisual Media Services Directive (AVMSD) at the European level, those responsible have taken the first steps towards adjusting competition rules for digital market participants in Germany. As a result of ongoing efforts to provide information and regular exchanges, ProSiebenSat.1 has positioned itself as a key reliable partner of these individual committees and working groups. Together with politicians and industry, the Group wants to explain and promote the opportunities of digitalization and thus to strengthen Germany as a location for business and innovation in the long term.