Germany Pay TV Revenue Tops $2.8 Billion

Brian Sullivan, CEO of Sky Deutschland

Long considered a weak link in Europe's pay TV sector, Germany may have turned a corner as broadcasters plow more than $1 billion into programming.

Germany's pay TV sector has long lagged behind those in the U.K., France and Italy. But figures released Friday by the country's association of commercial broadcasters suggest the market may have turned a corner in 2013.

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Pay TV revenue in Germany hit $2.8 billion (€2.05 billion) last year, a new all-time high, and is forecast to grow to $3.1 billion (€2.3 billion) in 2014. Across all of German-speaking Europe (which includes Austria and Switzerland), revenue hit $3 billion (€2.2 billion) last year and is set to top $3.4 billion (€2.5 billion) in 2014.

The figures, from the association of German commercial broadcasters, the VPRT, include both traditional pay TV and paid video-on-demand services. The latter have exploded in Germany and look set to grow further, with Netflix planning to launch across German-speaking Europe this fall.

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According to the VPRT, pay TV subscribers across German-speaking Europe topped 7 million last year. That pales beside the more than 10 million subscribers to Britain's BSkyB but still a major improvement over past years.

"[This] highlights a striking development on the pay TV market," said Sabine Christmann, director of regulatory affairs and public policy at Sky Deutschland, Germany's leading pay TV platform. "It proves that pay TV has not only established itself in Germany, but is constantly growing. This positive trend is due to the joint efforts of all Germany's pay TV providers."

In an equally positive sign, the VPRT estimates pay TV channels invested some $1.1 billion (€800 million) in programming in 2013, much of it for in-house production.

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Sky Deutschland, controlled by Rupert Murdoch's 21st Century Fox, recently announced its biggest-ever investment in original programming, saying it will co-finance Tom Tykwer's $34 million (€25 million) period crime series Berlin Babylon together with German public broadcaster ARD.

Sky is expected to put up around $5.5 million (€4 million) for the first season of the series, set in 1920s Berlin, with ARD supplying $12 million (€9 million). The rest will be financed through international sales, which Beta Film is handling.

Twitter: @sroxborough