German broadcasting giant ProSieben, speaking at Deutsche Bank’s 2020 European TMT Conference, confirmed that Q2 this year was “tough” in terms of ad-revenues, although July (down 20 per cent) and August (“slightly positive”) could indicate a return to better times for the final 4 months of the year.
Deputy Group CFO Ralf Gierig, addressing the event, said that September’s ad revenue is likely to be better but it is still early days given that ad-booking lead-times are now shorter and thus give the broadcaster less visibility than usual.
Deutsche Bank, in its note to investors, said that while it appears that ProSieben is happy to give this advertising flexibility, it will not lower its prices to stimulate demand. “Pro7 reiterated that 90 per cent of its advertising inventory is sold to media buyers and they receive monthly rate cards which Pro7 does not want to dilute.”
As to spending cash on existing and new programming the broadcaster reiterated its intention to lower programming costs by ~€50 million this year; “In 2020 (programming costs were €1.03 billion in total and thereof ~€980 million related to consumption in 2019). Programming costs could then potentially step up next year as advertising revenue recovers. Presently, Pro7 is focusing on producing the same content at lower costs and by avoiding some formats altogether. The current content focus remains the reality formats (The Voice, The Masked Singer) and locally-commissioned content which generates good engagement.”