Maxdome has maxed out. The German video platform, owned by ProSiebenSat.1, will be shuttered this summer following a prolonged period of stagnation – going against the grain of where Maxdome’s main SVoD rivals are heading. It brings Mediaset one step closer to getting the pan-European OTT video business the Italian media conglomerate has long craved.
This on its own is not new knowledge. We have known for a whole year that Germany’s largest VoD library would eventually be enveloped by Joyn, ProSiebenSat.1’s other video streaming platform operated in partnership with Discovery. At the time, Mediaset had just started its aggressive takeover of the German public broadcaster – when Faultline highlighted how Mediaset was seeking influence over the merged SVoD offering. Now, Mediaset owns almost a quarter of ProSiebenSat.1 and will be slapping its influence all over Joyn, including carrying content from its own majority shareholder Vivendi (Fininvest).
Things are really not going to plan for ProSiebenSat.1. As well as dealing with Mediaset’s aggressive takeover and the fate of Maxdome, the broadcaster has revealed that TV core advertising revenues are expected to be down by as much as 40% in April 2020, compared to the previous year.
Last week, Mediaset took its shareholding in ProSiebenSat.1 up to 24.2% after seizing another 4.1% slice in the business, giving it 24.9% voting rights. Creeping over the 20% mark means Mediaset will have additional investment responsibilities and now is the time to make them.
The situation has escalated dramatically. Only five weeks ago, Mediaset held just 4.2% in ProSiebenSat.1. In late March, Mediaset’s Spanish TV arm, Mediaset España, through which it conducts much of its miscellaneous activities separate from Vivendi, bought an additional 4.25% in ProSiebenSat.1 – taking Mediaset’s total share to 9.75%. Faultline warned back in May 2019 that Mediaset had sowed the seed for an unwarranted share grab in ProSiebenSat.1 and the only thing we are surprised about is how long it took to materialize. Or perhaps not, given how the stock market has since suffered and Mediaset has saved itself a pretty penny.
Like most others in the broadcast industry, ProSiebenSat.1’s share price tanked in mid-March, providing a perfect opportunity for Mediaset to pounce. Its share price has since recovered marginally but clearly Mediaset’s patience, almost a year after first making its intentions known, has paid off.
But looking ahead, the way we see Mediaset’s approach of ProSiebenSat.1 is not so much about taking on the established SVoD heavyweights, but to carve out a dominant position in the free-to-air TV market to steal eyeballs away from the invincible Netflix. These plans may be put on the backburner as advertising revenues in broadcast TV are under pressure, although it wasn’t long ago that Mediaset itself conceded that going OTT-only was the inevitable fate of its DTT operations.
Plenty of Maxdome content is already available as part of the Joyn Plus+ subscription, which costs €6.99 a month.
ProSiebenSat.1 recently retracted its 2020 financial outlook. Entering the second quarter, the group expects trading across all segments to be heavily impacted by the crisis, including the Red Arrow Studios business which continues to be impacted by postponements of productions.