Channeling success in Germany

Free-TV newbies find their niche in crowded field

They said launching a new free-TV channel in Germany, arguably the most crowded and competitive free-to-air market in the world, was considered impossible. They were wrong.

Five new free-to-air channels have launched in Germany in the past two years. The overall market share for the established German big three networks made up of channels owned by RTL Television, ProSiebenSat.1 and the public broadcasters continues to fall, while the audience for the "third generation" of free-TV newcomers continues to grow.

Two of the newcomers have been so successful that they already are attracting buyout offers.

NBC Universal's Das Vierte launched in late 2005, mixing "Baywatch" and "Law & Order" reruns with feature films from Universal's massive back catalog. Since then, it has managed to grab about 1% of the total German audience, with viewing figures doubling in the past year.

NBC Uni confirmed rumors that it has received several offers for Das Vierte and has asked Rothschild Bank to peruse them.

"Some are for buyouts, some for joint-venture partnerships," NBC Universal vp communications Denise Bassett said. "We are considering all options and haven't made any decision yet concerning the channel. But I think the outside interest shows what a good job our team in Germany has done in establishing this network in what is a very difficult market."

Another third-generation newcomer attracting suitors is Discovery Channel's DMAX. The men's channel is the success story of the year here with its mix of red-blooded reality series, geek-friendly science programs and barbecue-heavy cooking shows.

Before DMAX came along, almost all German broadcasters were chasing women. The lucrative young male demographic was wide open, and DMAX took aim with a series of in-house- produced reality shows, including "The Ludolfs," about four grungy brothers who run a scrap heap, or "Fat Machines," where macho German film star Jurgen Vogel test drives the planet's biggest, fastest and most destructive vehicles.

When DMAX head Patrick Horl resigned suddenly last month, word went around that Discovery was looking to sell the channel to a private-equity investor. Reports claimed the unnamed PE group saw DMAX as an ideal brand to take beyond Germany's borders.

Discovery so far has declined comment on possible buyout offers, except to say it remains committed to DMAX.

Das Vierte and DMAX might be attracting most of the attention, but the other third-generation channels — Viacom's Comedy Central, kids channel Nick and Tele Munchen's film-focused Tele 5 — have had similar success in targeting niche audiences and honing distinctive brand images. They have proven wrong the pundits who claimed that Germany's boutique audiences — be they young men, comedy fans or film buffs — were too small or difficult to reach.

For the first time this year, the newcomers joined forces for a road show targeting German advertisers, a sign that Germany's third generation channels have come of age.

Alone they might be tiny, but together they account for more than 5% of the German audience. And they are just getting started.