Innovation

In order to take the opportunities of digitalization and meet the future challenges in our dynamic industry environment, ProSiebenSat.1 is reinforcing its power of innovation with various measures. The primary objectives are to exploit innovative business ideas by cooperating with start-ups, to use new technologies in the advertising market, and to align the human resources strategy accordingly.

In 2015, ProSiebenSat.1 Group expanded its start-up business, including on an international level. Thanks to the expansion of its existing scouting network with the countries Great Britain, Denmark, Sweden, Poland and France, the Group can identify global trends and promising companies even faster. Previously, the Group was already represented by scouting offices in the US and Asia. The Group helps attractive companies enter the market in Germany and Europe. In this way, we are transposing our successful investment models to the global market in order to establish ourselves internationally as a media investor. The “European Media Alliance” project was also founded to give the Group’s own start-ups the opportunity to expand into other European countries and there to obtain TV media from cooperation partners. For the first time, the partners of the European Media Alliance also took part in SevenVentures Pitch Day, which was held for the fourth time at the NOAH Conference in London; they provided additional media services for the funding format.

Since 2013, the Group has been promoting start-ups with the ProSiebenSat.1 Accelerator program. Through the close cooperation with company founders, we ensure that we can draw on trends and new technologies at an early stage. ProSiebenSat.1 holds investments in young enterprises via its subsidiary SevenVentures, which are supported via the media-for-revenue-share and media-for-equity investment models. In 2015, ProSiebenSat.1 launched a project to promote high-growth digital companies together with Axel Springer. The initiative aims to support innovative business ideas and start-ups in order to improve Germany’s positioning as a digital location, including on an international level. Among other things, both partners acquired a minority interest in the US firm Jaunt, which specializes in the field of augmented reality. This provides new opportunities to make television advertising even more attractive for brand owners and viewers.

As well as the ventures business, innovation also plays a significant role in the TV advertising market. For this reason, the Group invested in the companies Virtual Minds and SMARTSTREAM.TV in 2015. Another example of technological innovation in marketing is addressable TV. ProSiebenSat.1 has used it to introduce a new generation of TV advertising and link the reach of the mass medium television with target-group-specific online offerings. The technological standard Hybrid Broadcast Broadband TV, or HbbTV, allows users to press the “Red Button” on the remote control to gain access to additional digital offerings on smart TVs. For example, during an advertising spot they can call up the provider’s microsite with further information at the touch of a button. In 2015, SevenOne Media combined this interactive function with the new special advertising form “SwitchIn” for the first time. The digital advertising window, which can be adjusted according to target group and geographical location, overlays a portion of the screen as soon as the viewer tunes in to a ProSiebenSat.1 station. The spot is only shown to members of the selected target group during the campaign period. ProSiebenSat.1 has already implemented 48 campaigns for 25 advertising customers with addressable TV.

In order to succeed in the long term, we also set great store by the ideas and creativity of our employees. In 2012, ProSiebenSat.1 therefore established a central department for innovation and technology trends in the Group. The team has since continuously analyzed innovations in the market and processed relevant information for the management and employees. Moreover, employees can try out cutting edge technologies like 3D printers, virtual reality glasses, and drones for themselves in the ProSiebenSat.1 Tech Innovation Lab. The goal of the initiative is to give knowledge of current trends and to provide a basis for innovation. In addition, Learning Expeditions are important measures for the promotion of our employees’ innovative skills. In the one-week Learning Expeditions, ProSiebenSat.1 employees travel to international business regions in order to talk to representatives of large enterprises as well as researchers and academics. The initiative launched in 2011 and has become established at the Company. Around 250 employees have taken part so far.

Research and development

 

ProSiebenSat.1 Group does not carry out research and development (R&D) in the conventional sense of an industrial company. Therefore, the activities in this area do not fulfill the traditional definition of R&D, so more detailed information according to DRS 20 is not included in the Management Report.

Nonetheless, research does hold a position of high importance at ProSiebenSat.1 Group. We conduct intensive market research in every area relevant to our business activities and in every area in which the Company foresees growth potential. In 2015, expenses for Group-wide market research activities amounted to EUR 7.3 million (previous year: EUR 7.5 million). The various research units prepare investigations and analyses on advertising impact, on trends in the advertising market and digital sectors as well as on media usage and also assess economic and market projections. Those responsible in the Group use the results of the market analyses for operational and strategic planning. At the same time, market data and analyses are an important basis for capably advising our advertising clients. With its studies, the Company provides advertisers with valuable knowledge for marketing and advertising planning, which constitute an important basis for investment decisions.

Program research also plays a decisive role in the program development phase. An important task is the assessment of international TV trends with regard to their potential for the German TV market. In addition, the research team regularly provides quantitative and qualitative studies and analyses of the ProSiebenSat.1 stations’ programming. Among other things, new formats are tested with the aid of survey and audience screenings. The research department also carries out ad hoc tests on shows that have already been broadcast. Based on the results, we can adjust formats in the development phase and optimize TV programs that have already been broadcast, thus increasing success rates.