MUNICH (Reuters) – ProSiebenSat.1 Media believes that price increases by U.S. streaming giant Netflix could ease competitive pressures on the German group’s core TV business and is bullish on growth at its e-commerce arm, CEO Max Conze said.
FILE PHOTO – The Netflix logo is seen on their office in Hollywood, Los Angeles, California, U.S. July 16, 2018. REUTERS/Lucy Nicholson/File Photo
Conze took the helm at the Munich-based broadcaster last June but has had a rough welcome from investors who have sent its shares to seven-year lows on doubts that he can revive its ailing free-to-air TV business.
The former CEO of UK appliances company Dyson told Reuters that plans to relaunch a German streaming venture in cooperation with Discovery Inc, public broadcaster ZDF, publisher Axel Springer and possibly others were on track for late summer.
“We think there is very meaningful space next to Amazon and Netflix to create a German Hulu that aggregates all the German content that people love,” he said, referring to the Disney-backed U.S. platform.
Asked about the recent price increase by Netflix, as well as the cash burn reported in its latest results, Conze expressed hope that the U.S. streaming giants would move towards a model that seeks to target profit as well as growth.
“Part of the challenge has, of course, been that the streaming direct-to-consumer models – both Netflix and Amazon – are fundamentally subsidised. They are not really money-making models,” said Conze.
“They are great for you and me as consumers, but hard to compete against. If these companies get a little bit more focused in the future on how to turn this into a profitable business model, that actually creates an environment that makes it somewhat easier for us to compete.”
Speaking on the sidelines of the DLD Munich technology conference on Sunday, Conze also forecast that ProSieben’s e-commerce arm NuCom would this year achieve revenue growth, including acquisitions, in excess of 20 percent.
“That business is developing, growing rapidly and very synergistic with entertainment,” he said.
NuCom’s match-making property Parship Elite bought U.S. dating site eharmony late last year and recently secured direct control over home services company Aroundhome.
The e-commerce unit, which owns 10 properties, has “another couple of things that are cooking”, said Conze, declining to elaborate.
Reporting by Douglas Busvine; Editing by David Goodman