7TV is making an ambitious bid to become the broadcaster-friendly, mass-market streaming service that keeps German viewers away from Netflix and Amazon Prime and at the same time gives local production companies and European studios somewhere to reach a broad demographic in a multi-thematic offering without selling rights to the U.S. ‘OTT’ giants. The streaming service has taken the existing online linear and catch-up offer from ProSiebenSat.1 Media (already called 7TV) and added the Discovery Communications free-to-air content portfolio in what is currently a 50/50 joint venture between these two companies. The idea is that other content owners will join the platform, some of whom could also become shareholders. Mediengruppe RTL Deutschland has made it clear that it will not be joining the platform, however.
The first non-shareholder content owners came onboard this week, bringing live and catch-up television from the SPORT1, WELT and N24 Doku channels. SPORT1 is a privately owned, ad-funded sports channel based in Munich. WELT is the Axel Springer owned news brand, while N24 is the documentary channel from the same company. The service will be dominated by free-to-air advertising-funded content initially, though there are plans for some paid content later.
Speaking at Connected TV World Summit this week, Alexander von Woikowsky, Managing Director and Chief Content Officer at 7TV Joint Venture GmbH, made it clear that he viewed 7TV as a way to counter the threat from what he called the FANGA companies (Facebook, Apple, Netflix, Google, Amazon). He outlined the increasing competition for viewing time in Germany, driven by the growth of streaming services, then noted the huge content budgets available for Amazon and Netflix and the way these companies are diversifying their content offer. “Everyone is fighting for everything,” he said of the content rights and commissioning environment.
Woikowsky suggested that the television industry is currently playing a real-life equivalent of the classic arcade game PAC-MAN, where hovering ghosts chase you around a maze while you try to feed yourself. In his analogy, it is the ‘FANGA’ (GAFAN) companies eating people. Talking about content providers in general, he said: “Everyone did great deals with Netflix and after three or four years Netflix said, ‘Thanks for letting me learn what consumers like – now I am going to do it for myself’.”
Revealing the core rationale behind 7TV, he declared: “We think the answer is to build a multi-purpose network.”
Production houses and studios in Germany support the idea, Woikowsky says, and 7TV has been encouraged by its discussions with broadcasters. “It is interesting to work with Amazon but that is not a long-term solution,” he argues. “We can be the broadcast-friendly German player in this [online streaming] space.”
He believes that at least 70% of the mainstream German broadcast market could be represented on the platform. “We are in good conversations with them,” he said.
The absence of Mediengruppe RTL Deutschland, the German part of RTL Group, means this cannot become the all-encompassing platform 7TV hoped for. RTL is a major commercial broadcaster whose German free-to-air channels include RTL Television, Vox, N-TV and RTL Nitro. A spokesman confirmed today that Mediengruppe RTL Deutschland is definitely not interested in being involved and the focus for streaming in Germany is on its own offer, TV NOW. This position does not necessarily apply to RTL Group as a whole, it should be noted.
7TV was established with a corporate structure that would make it easy to add other shareholders. Woikowsky confirmed that ProSiebenSat.1 Media is willing to work with more joint-venture partners. “The shareholding is not the key point, here. For us, as a platform, that [share structure] does not matter. We can create something bigger [for the broadcast market] to compete against the strong U.S. players.”
Today, 7TV contains 12 channels across four content companies (ProSiebenSat.1, Discovery, Sport.1 and Axel Springer). The ProSiebenSat.1 channels are ProSieben, SAT.1, kabel eins, sixx, ProSieben MAXX, SAT.1 Gold and kabel eins Doku. Discovery has its free-to-air channels DMAX and TLC onboard, while there is also a Eurosport zone that provides highlights and clips.
The FC Köln vs Borussia Dortmund Bundesliga game was shown on the platform in February. Eurosport owned the exclusive rights to the game and it was shown free, with advertising. The Eurosport tie-up also delivered some Olympic Winter Games coverage through the TLC channel. When the 50/50 joint venture was announced, Michael Lang, President, International Development & Digital at Discovery Communications said: “This is an exciting new way for millions of German TV fans to watch their favourite Discovery shows and is just the beginning of a dynamic new partnership.”
Alexander Vassilev, CEO of 7TV, said of the new partners (Axel Springer and Sport.1) this week: “They underscore our persistent strategy of an open approach and our endeavour to create the VOD platform for German speaking TV content, and [a] live TV [home] for all digital channels through 7TV.”
Woikowsky stressed that the platform is open to born-digital content providers as well as classical broadcasters. “We are looking for more opportunities to make the service relevant to more people. We are trying to build a one-stop shop.” ProSiebenSat.1 Group has its own digital studio called Studio71, of course. Headquartered in Berlin and Los Angeles, this company creates digital-only content for different digital platforms.
Although 7TV is focused on the German market, there is an opportunity to take the service overseas. That is something which is being considered.
The whole service is built on the technology stack and backoffice used by ProSiebenSat.1 for its original 7TV offering. All the content is being streamed (whether linear or on-demand) directly from this platform, so on the 7TV app consumers do not click on content to be directed to a separate content owner player service (as with some online aggregator user interfaces). 7TV plans to refresh its platform with a joint technology development between the current shareholders, but is not giving a timeline for that.
Advertising on 7TV is being sold by ProSiebenSat.1 Media’s sales house today (including for Discovery) but this is not an inherent part of the business model. Broadcasters who want to sell inventory via their own sales house will be accommodated. Currently there is not much new inventory to sell anyway, as the linear channels on 7TV are exact digital simulcasts of the broadcast signal, with the original ads baked-in. There are some pre-rolls being added, however. Dynamic advertising insertion (replacing ‘original’ ads with online replacements, giving the opportunity for targeting) is on the roadmap.
Addressing the London audience at Connected TV World Summit, von Woikowsky gave a long list of the streaming services now available in Germany, as competition increases. These include Magine TV and Waipu.tv (subscription linear streaming), Zattoo and Spielfilm (ad-funded linear streaming), Netflix (SVOD), and Maxdome and Amazon Video (SVOD/TVOD), among others. (Maxdome is owned by ProSiebenSat.1 Media). Sky provides its Sky Ticket offering, equivalent to NOW TV in the UK. This competitive marketplace probably explains why the German regulator gave 7TV the green light without any fuss, having prevented German broadcasters from gathering under one online roof in the early days of multiscreen and online television.
Germans are not only streaming more; they are starting to pay more for TV, as well. Their traditional reluctance to pay, rooted in the quality and volume of free-to-air TV, is beginning to erode. That is a potential threat to ‘classic’ broadcasters in the region and another factor that makes 7TV a timely initiative.
Photo shows the desktop version of 7TV. You can see the diffferent channel brands listed along the bottom of the screen.