ProSieben divisions merge in restructure

German media giant ProSiebenSat.1 is combining its Red Arrow Entertainment Group with multi-channel network Studio71 and merging its pay TV operations with its Maxdome SVoD service.

Thomas Ebeling

The overhaul will create three business areas, incorporating entertainment, content production and commerce operations.

Red Arrow Entertainment Group will be brought together with multi-channel network Studio71 under the name Red Arrow Studios, with digital and traditional production businesses brought under the same roof.

The ‘content production and global sales’ pillar is designed to provide ProSieben’s traditional production business with direct access to a new talent pool via Studio71, while also enabling its digital offerings to grow.

ProSieben said it would “make optimal use of the synergies between the 21 production companies, the distributors Red Arrow Studios International and Gravitas Ventures, as well as Studio71” to increase business.

The German group is also exploring ways to accelerate the growth of Red Arrow Studios by securing investment from third parties.

Meanwhile, divisions including TV broadcasting, distribution, advertising and digital services, such as Maxdome and the 7TV app, will be combined under an ‘entertainment’ umbrella.

The company, which hopes the changes will save around €50m (US$60m), is also increasing investment in data-driven analytics for advertisement and said it “sees potential for value creation” in Europe via partnerships within the European Media Alliance.

The scheme, set up by ProSieben in 2014, sees 12 media companies from across the continent working together to create investment opportunities, with Central European Media Enterprises the group’s latest partner.

ProSieben is also bundling its retail subsidiaries into four categories, with the subsets sitting within a new ‘commerce’ division.

The changes come after ProSieben CEO Thomas Ebeling said he would step down in February next year. The company’s shares have endured a torrid time recently as its operations, particularly in TV, have failed to pull in expected revenues.

ProSieben said that more than half of its revenues now come from outside the traditional TV advertising business, with the changes announced today designed to “further accelerate this successful transformation.”

“By combining the linear TV business with the digital entertainment division, ProSiebenSat.1 is able to provide increasingly platform-independent offers and universal marketing of programming content, thus achieving additional synergies in this area,” the company said.

Ebeling added: “With the three-pillar strategy, we are setting ProSiebenSat.1 up competitively for the future, strengthening the group for further growth and creating additional value for employees and shareholders.”