German TV Giant ProSiebenSat.1 Sees Signs of Summer Ad Rebound

© ProSiebenSat.1 Media SE
Rainer Beaujean

Television advertising has begun to pick up as Germany restarts its economy following months of lockdown.

Things still look bad, really bad, for the television advertising but German free-TV giant ProSiebenSat.1 sees signs of hope.

In its quarterly earnings report Friday,ProSiebenSat.1 said stronger ad bookings for July were the "first positive trend" in the TV ad business since the start of the coronavirus crisis. The company, which operates several free and pay TV channels in Germany, as well global TV production group Red Arrow (Love is Blind), expects ad revenue to drop by "slightly less than 20 percent" in July compared to last year.

That's not good but it is substantially better than the 34 percent drop ProSiebenSat.1 recorded in the second quarter, as Germany went into COVID-19 lockdown.

"The economic environment is beginning to brighten," said ProSiebenSat.1 CFO and chairman of the executive board, Rainer Beaujean. "We expect a decline of slightly less than 20 percent in July advertising revenues compared to the previous year and thus a clearly lower decline than in the past quarter. There are also signs of a further improvement in August with a minus of around 10 percent currently."

Germany went into a partial lockdown in March in response to the COVID-19 pandemic but began re-opening in late May.

While there has been progress, infections have begun to rise in recent days. Thursday saw 902 new confirmed cases of COVID-19 in Germany, according to the Robert Koch Institute.  

As the economy has gone into hibernation, advertising revenues has followed suit. ProSiebenSat.1 saw revenues drop 25 percent to $836 million (€709 million) in the second quarter. Overall, revenues for the first half of 2020 were down 12 percent to $1.93 billion (€1.634 billion).

ProSieben's production business, under its Red Arrow Studios division, took a hit as governments worldwide imposed new COVID-19 safety measures. External revenues at Red Arrow dropped 31 percent in the second quarter to $120 million (€102 million).

But with more Germans stuck at home during lockdown, audiences figures went up. ProSiebenSat.1 said overall viewership across its linear and digital platforms increased 3.4 percent.

Beaujean has declined to give a full-year forecast, citing the continued uncertainty but noted the period from September to December "will be decisive for the Group’s business performance in the full-year. In the past, ProSiebenSat.1 has generated around 50 percent of its adjusted EBITDA in this period."