ProSiebenSat.1 looks to Joyn growth as ad sales hit by economic downturn

(Source: ProSiebenSat.1)

Germany’s ProSiebenSat.1 now expects full-year earnings to be at the lower end of the range forecast at the beginning of the year because of a slower than expected economic recovery in Germany, despite a boost in advertising sales from its Joyn streaming service.

Advertising revenues declined by about 5% in the third quarter, with overall revenues dropping 3% to €888 million, a smaller decline than that experienced in the first half thanks in large part to growth in digital from Joyn. Digital advertising was up by 16%, boosted mostly by Joyn and also by audio sector sales.

Martin Mildner, CFO, said that Joyn monthly video users increased by 13% compared to the prior year to 3.8 million. He said that the company was working “full speed” on expansion of the offering, for example with the launch in the quarter of Joyn’s first FAST channels, which had attracted one million users.

The extension of Joyn to the Austrian market meanwhile added 400,000 monthly users to the platform in the quarter. Joyn sawits viewtime minutes increase by 1% to 6.2 billion minutes in the quarter.

Joyn’s AVOD revenues were up 58% on the prior year.

ProSiebenSat.1 posted adjusted EBITDA of €110 million for the quarter, slightly up on the €108 million for the prior year thanks to cost cutting. However, adjusted EBITDA for the first nine months is still tracking below that of last year.

Problems with the higher margin advertising business meant that adjusted EBITDA in the entertainment business itself declined by 7% to €85 million.

While attributing the decline in ad sales to Germany’s economic problems, ProSiebenSat.1 also lost audience share in third quarter, with its family of linear channels achieving a share of 24% in the 14-49 age group, down from 25% for the prior year. The group has adopted as strategy of focusing on locally relevant content that can be aired across linear and digital platforms, including live Bundesliga coverage on Sat.1.

ProSiebenSat.1’s dating and video businesses was meanwhile also hit by the country’s economic woes and by changes in regulation.