Financial downturn impacts broadcasters

By Robert Briel | May 26, 2009

Parm Sandhu

ANGA CABLE 2009 – COLOGNE. To what extent does the financial downturn impact cable operators and broadcasters? This was one of the issues discussed in the opening session, better known as ‘the elephants’ round’, at this year’s ANGA .

“We do not see effects of the crisis,” said Harald Roesch, CEO Kabel BW, “but this might change if more people lose their jobs. However, we have good arguments for our customers, such as HDTV and other new things we have in our nets, like high speed internet.”

Parm Sandhu, CEO Unitymedia, agreed. “In a downturn, people tend to spend more time at home, so the kind of entertainment they get on their TV is much more desired than going out to the cinema, going out to dinner. We should maximise that space with new services such as a new VOD platform and the PVR in cooperation with the rest of industry. There is a strong spirit to work together with broadcasters and content owners.”

Sandhu said commercial broadcasters should look for new business models. “They were created 25 years ago on the back of cable; now their business model has come to the end of its life cycle. It is an excellent moment now to create new business models.”

Dr Marcus Englert, chairman new media and diversification of the ProSiebenSat.1 Group, didn’t quite agree. “We have seen a dent in the figures before. But a turnover of four billion is quite a lot, and I am sure broadcasting financed by commercials is here to stay. But VOD and other business models will become more important. We believe in a hybrid model with commercials and payment as we would like to become less dependent on the advertising industry. But at the moment we still have 85% of our turnover coming from commercials.”

“I am not saying TV advertising is disappearing altogether,” reiterated Sandhu, “but there is a fundamental change. The challenge we all have is how do we diversify? The current economic climate makes it difficult. Bad enterprises can become very creative in finding new solutions. Perhaps the cable industry hasn’t been ready in the past, but now the time is right to move forward.”

“We expect less income,” said Prof Dr. Carl-Eugen Eberle, legal councel at ZDF. “But this is not due to crisis but to a political decision [to let the licence fee rise less than the rate of inflation]. We will also receive less, because of the downturn, because people who are on welfare do not have to pay the licence fee. We have no exact figures yet, but the crisis will affect us.”