creating new growth - prosiebensat1.com · 2,676 1,936 12,802 itv endemol fremantlemedia red arrow...

| October 15, 2014

ProSiebenSat.1 Media AG | October 15, 2014

Creating new growth CMD 2014 Content Production & Global Sales – Jan Frouman

| October 15, 2014

Red Arrow cordially welcomes you to today's presentation

Red Arrow Reel

| October 15, 2014

Content

Production = developing scripted & non-

scripted ideas and

producing finished program

Global Sales = selling group or 3rd

party finished tape & format

ideas to channels and

platforms around

the world

What is Content Production & Global Sales?

Content Customers

| October 15, 2014

Key market trends

Market

consolidation

Ongoing and active market consolidation and M&A activity

(e.g., Shine / Endemol, Discovery / All3Media, ITV)

Rights

retention

Rights retention is becoming more challenging and competitive in key markets

(e.g., US, UK)

International

scripted product

The US is becoming a more viable home for acquired, internationally co-produced,

or reformatted scripted product (e.g., Lilyhammer, Broadchurch, etc.)

Deficit

financing

Distributors are increasingly aggressive with deficit financing and minimum

guarantee commitments (e.g., Fremantle Media, Shine, etc.)

Digital push Growing exploitation of own portfolio in own digital environment, and direct

brand relations for classic TV and digital

Growing appetite for English-language scripted product (e.g., Netflix, Amazon,

Hulu, and more than 65 channels in the US are commissioning scripted product) English-language

scripted product

| October 15, 2014

On air format hours by distributor (Europe) Total broadcaster income related to

distributor’s formats (Europe)

Red Arrow has become a credible player in the European

TV distribution business

Source: Madigan Cluff, Essential Television Statistics and Digital TV Research; Statistic measuring the number of hours of formatted programming scheduled across European free-to-air channels and the income

generated by each format (financial benefit sourced by activities such as advertising revenues or a proportion of annual household license fee income that broadcasters receive from screening these formats)

[in FY 2013; in USDm]

4,352

3,460

3,136

2,676 1,936

12,802

ITV

Endemol

FremantleMedia

Red Arrow

Shine

Other*

*Other incl. Zodiak, All3Media,

Eyeworks and Talpa.

[in FY 2013]

589

439

298

169 154 153

148

147

144

130

559

Endemol

FremantleMedia

ITV

Shine

BBCWW

Talpa

All3Media

Red Arrow

Sony

Zodiak

Other

| October 15, 2014

Red Arrow’s growth strategy since 2010

Consolidation and

continuous portfolio

optimisation

Strategic focus on

mature businesses

and key TV markets

(US & UK)

Footprint in key

P7S1 territories

established through

boutique

acquisitions and

start-up

investments

Founded 2010 Since 2012

Build scale through

identified growth

initiatives (e.g.

digital), strategic

partnerships and

selective

acquisitions

Further geographic

expansion /

development

through creative

partnerships

including SYNC

Media, Screenz,

STV and One Three

Media

Since 2013 From 2014

| October 15, 2014

China

West Coast

UAE

1 Note: Commercial Partner

IL

SE/DK/NO

UK

(1) (1)

D/AU

East Coast

Powerful footprint: 13 production assets and one MCN across

7 territories, with multiple creative partnerships

(1)

(1)

| October 15, 2014

Strong growth in the biggest TV market in the world

• Married At First Sight

(FYI)

• Little Women

(Lifetime)

• My Man Can (WE)

• The Taste S.3 (ABC)

• Break-through in

scripted: Odd Mom Out

(Bravo)

• Mob Wives S. 5 (VH1)

• Hawaii Life S.3 (HGTV)

• Comedians (FX)

• Bosch (Amazon)

• Odyssey (NBC)

• Say Yes To The Dress

S. 13 (TLC)

• The Big Day S. 3 (TLC)

• Driving Vegas (A&E)

• Midnight Feast (FYI)

• POV Killer (Lifetime)

• Mafia Rules (H2)

| October 15, 2014

Red Arrow’s portfolio is in line with current content trends

Movie stars on TV Real reality

Branded entertainment

Scripted Larger-than-life characters

Everyone agrees that this is the golden age of

scripted.

E.g.: Bosch, Lilyhammer, 100 Code, Odd Mom

Out, Esio Trot

The millennial generation includes ‘the

extremely attractive 18-to-34 demo’. Cable

networks need to work hard to stay relevant to

this group.

E.g.: Ctrl Freaks, Selfie

Doing TV used to mark a movie star as a has-

been. Now, when television is so good, even

the biggest stars land on the small screen!

E.g.: Esio Trot (Dame Judi Dench & Dustin

Hoffman), Bosch (Titus Welliver)

Outrageous behavior isn't just a prerequisite,

it's the goal. Larger-than-life personalities in

shocking but real circumstances.

E.g.: Little Women: LA, Mob Wives

As millennials become more and more difficult

to reach through traditional media, brands are

looking for new and creative ways to engage

them.

E.g.: Video Game High School

Millennials

Viewers are tired of shows that don’t feel

‘authentic’. They steer away from reality that is

over-scripted and over-produced.

E.g.: Married At First Sight, The One That Got

Away (Lost In Love)

| October 15, 2014

KPIs: development, production and sales

Formats in development

Pitch-ready titles

Hours produced

Titles in the catalogue

Countries sold to1

Production

Sales

Development

Hours in the catalogue

Note: 2012 volume decrease in produced hours is due to cancellation of German telenovelas; 2014 full year estimates as of July 2014

1 *Incl. sovereign countries and administrative territories

250

125

2011

650

500

130

7,300

550

350

2012

550

590

150

7,900

800

500

2013

650

610

180

8,400

900

550

900

710

200+

10,000

2014E

| October 15, 2014

The Taste (Kinetic Content):

• Emmy nomination (Anthony Bourdain for

“Outstanding Host: Reality-Competition Program”)

Recognized creative excellence

Betty White’s Off Their Rockers (Kinetic Content):

• Emmy nomination (Betty White for “Outstanding Host:

Reality-Competition Program”)

* British Academy of Film and Television Arts Awards.

A League Of Their Own (CPL Productions):

• BAFTA* (“Best Comedy Entertainment Programme”)

• Rose d’Or nomination (“Entertainment”)

Married At First Sight (Snowman Productions DK):

• Rose d’Or nomination

(“Reality & Factual Entertainment”)

Lilyhammer (Rubicon):

• Two Golden Nymph Awards (“Outstanding Actor in a

Comedy TV Series” & “Best International Comedy TV Series”

Extreme Fighting (Snowman Productions NO):

• Gullruten Awards nomination

(“Best Docu/Factual Series”)

| October 15, 2014

93% of 2015 CMD target achieved, well on track for 2018 target

2010 – 2015 Revenue growth target

2012 – 2018 Revenue growth target

93%

achieved

35%

achieved

116

125

35

100

70%

Linear projection

of CMD target

25%

Linear projection

of CMD target

CMD 2015 target Achievement by Q2 2014 Achievement by Q2 2014 CMD 2018 target

[in EURm]

| October 15, 2014

1 Continue to build scale across key markets (US, UK)

3 Strategically launch and own global formats

4 Further build digital production capabilities

Key strategies

2 Become a leading independent source of English-language

scripted product

5 Create, own and monetize “Brands”

| October 15, 2014

Identify potential production assets based on the following criteria:

• Both established and boutique assets in key markets (US, UK, emerging markets)

• Accretive or fair-market valuation multiples

• Aligned incentives / partnership model

• Industry leading creators and producers

Continue to be selective about M&A:

Make sound judgments about the business and the people

running it, the impact on the existing culture at RA and the realistic

prospects for an accretive and healthy integration process

Continue to build scale across key markets 1

| October 15, 2014

Become a leading independent source of English-language

scripted product

• Building on the Bosch model, expand RAI‘s portfolio

of English-language scripted hit titles and library IP

• Aim for smart targeted investments (development,

deficit financing) against international distribution rights

• Create a new home for leading US show-runners,

creators and talent

2

| October 15, 2014

• Establish strategic development

partnerships to expand IP creation and

feed the group‘s pipeline

• Use existing broadcaster relationships as

a launch pad for big prime time formats

• Co-own and share economics within the

P7S1 Group as a whole

Strategically launch and own global formats 3

| October 15, 2014

• Be seen as a “digital studio” for

next generation creators and talent

• Create, distribute and monetize

home-grown YouTube channels

(à la “Delirium” via Off Their Rockers)

• Drive migration from digital to linear

and vice versa

Further build digital production capabilities 4

| October 15, 2014

Create, own and monetize “brands”

• Developing formats with strong ancillary

revenue potential

(licensing, merchandising, product

integration)

• Cultivating “global brand management”

as a core competence in the group

Exploit all revenue streams by:

5

| October 15, 2014

Overview: New / upcoming hits and highlights

Crime series

Social experiment Cooking

competition

Crime series

Family

entertainment

movie

| October 15, 2014

Married at First Sight: Record breaking success

Extreme social experiment propelling the dating genre to a new level:

Six singles who have failed to find love take their most radical step yet – they marry a complete stranger!

• Stellar premiere on DR3 Denmark (495% above

channel average)

• Second season commissioned for main channel DR1

• #1 telecast ever on FYI (prime time season

finale 552% above channel average)

• 2nd season and spin-off commissioned

•Sold to 15+ countries, with further contracts in

negotiations

| October 15, 2014

The Taste: Home-grown global hit format

First-time ever blind tasting

Food-based competition-elimination series

Superstar chefs incl. Nigella Lawson and

Anthony Bourdain

Format and finished tape sold to 80+ countries

incl. USA (ABC), UK (Channel 4), Germany (Sat.1)

| October 15, 2014

Harry Bosch: Ground-breaking US scripted project Outstanding

pilot premiere on Amazon; series commissioned

• Based on bestselling book franchise by Michael

Connelly (“The Lincoln Lawyer”)

• Starring Titus Welliver (“Argo”, “The Good Wife”)

• Showrunner Eric Overmyer (“The Wire”)

• Amazon Studios‘ first original drama series

• Pilot scored 19,000+ votes, 4.7 out of 5 stars on

Amazon Prime and 8.4 out of 10 stars on IMDb

| October 15, 2014

100 Code: English language Scandi crime series with an

all-star cast and crew

• Starring Michael Nyqvist (“Millennium”, “Mission Impossible”)

and Dominic Monaghan (“Lost”, “The Lord of the Rings”)

• Sold to Sky Deutschland, HBO Nordics, Kanal 5, amongst other

• Directed by Academy Award winner Bobby Moresco

(“Crash”, “Million Dollar Baby”)

| October 15, 2014

Esio Trot: UK bestseller book adapted for BBC1

Based on a book by bestselling author Roald Dahl

("Charlie and the Chocolate Factory", "Matilda")

Starring Dame Judi Dench and Dustin Hoffman

Produced by Emmy award-winner Hilary Bevan Jones

(“The Girl In The Café”) at Endor Productions for BBC1

| October 15, 2014

Summary

1

2 Strong revenue growth & improving profitability highlight positive

Group momentum

3

Group creative output achieving international success &

creative recognition

4 Go-forward growth strategy driven by key market growth, strategic

partnerships, content balance and distribution expansion

Red Arrow Entertainment Group has become a global player with

growing independence

| October 15, 2014

Disclaimer

This presentation contains "forward looking statements" regarding ProSiebenSat.1 Media AG ("ProSiebenSat.1") or ProSiebenSat.1 Group, including opinions, estimates and projections regarding ProSiebenSat.1's or ProSiebenSat.1 Group's financial position, business strategy, plans and objectives of management and future operations. Such forward looking statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of ProSiebenSat.1 or ProSiebenSat.1 Group to be materially different from future results, performance or achievements expressed or implied by such forward looking statements. These forward looking statements speak only as of the date of this presentation and are based on numerous assumptions which may or may not prove to be correct.

No representation or warranty, expressed or implied, is made by ProSiebenSat.1 with respect to the fairness, completeness, correctness, reasonableness or accuracy of any information and opinions contained herein. The information in this presentation is subject to change without notice, it may be incomplete or condensed, and it may not contain all material information concerning ProSiebenSat.1 or ProSiebenSat.1 Group. ProSiebenSat.1 undertakes no obligation to publicly update or revise any forward looking statements or other information stated herein, whether as a result of new information, future events or otherwise.

creating new growth - prosiebensat1.com · 2,676 1,936 12,802 itv endemol fremantlemedia red arrow...

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