ProSiebenSat.1 Invests in Online Video Service, Ups Growth Forecast

MUNICH: ProSiebenSat.1 has made a minority investment in the global online video service Pluto TV, and has raised its revenue growth targets, expecting that more than half of its revenues will come from outside of the traditional TV ad sector by 2018.

ProSiebenSat.1 did not disclose the size of the Pluto TV investment, saying only that it is in the “high single-digit-range” for about 14 percent of the platform. The deal makes the European media giant the largest strategic partner in the service. Scripps Networks has also invested in the latest round of Pluto TV financing, joining existing stakeholders US Venture Partners and Sky Ventures.

The ad-supported service operates more than 100 linear live channels, with partnerships in place with providers such as Bloomberg Television, Reuters, CBS, Paramount and Time Inc. Pluto TV has more than 5 million active users per month. Under the terms of the deal, Pluto TV will absorb ProSiebenSat.1’s own video streaming service Quazer, which delivers more than 60 special-interest channels in Germany. As part of the new partnership, Quazer’s managing directors, Olivier Jollet and Sören Ziems, will join the management team of Pluto TV.

Christof Wahl, executive board member for digital entertainment at ProSiebenSat.1, said, “The investment in Pluto TV represents a further logical step in our company’s digital entertainment strategy. The market for this kind of advertising-financed video streaming already amounts to €4 billion in the U.S. alone. We would like to help actively shape this dynamically growing mass market on an international scale and participate in this growth.”

Wahl continued, “With Quazer, we have demonstrated that we are capable of building a product and bringing it to market within just six months, a fact that attracted a great deal of interest on the part of this successful young American company. By working together, we will reach a global audience and will be able to offer advertising customers additional marketing opportunities.”

Tom Ryan, CEO of Pluto TV, said, “We’ve always had the ambition of being the global OTT destination for free television. This partnership is a giant leap toward realizing that goal. Combining both media power and digital expertise, ProSiebenSat.1 is the ideal partner to accelerate our entrance into German-speaking markets. Additionally, the talented Berlin-based Quazer team will strengthen Pluto TV, speeding the pace of both product innovation and international expansion.”

ProSiebenSat.1 also today revised its 2018 revenue target by €300 million ($331 million) to €4.5 billion ($5 billion), reflecting increased contributions from acquisitions. By 2018 the company expects that more than 50 percent of its revenues will come from outside of the traditional TV ad business. It estimates digital revenues of more than €1.7 billion ($1.9 billion) by 2018.

Thomas Ebeling, CEO of ProSiebenSat.1 Media, said, “We have a strong basis for further growth and a clear strategy. We are consistently pushing the intelligent combination of our high-reach TV stations with the digital offerings. Our new investments are developing very well, therefore we are once again raising our growth targets for 2018. Our customers—viewers, users and advertising customers—are clearly the focus of everything we do. We offer them first-class entertainment and strong e-commerce services on all our platforms. With online transactions and internet-based TV use, we will acquire data which will benefit both target groups. For our advertising customers, we are developing innovative 360-degree concepts that are tailored even more precisely to their consumers. Thus, advertising will be even more relevant for viewers and users alike. ProSiebenSat.1 is the first media group to consistently implement the combination of TV, content, e-commerce, digital entertainment and production.”

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