The German media landscape is characterized by a of private and public operators. Its market structure differs considerably from other countries. The German TV advertising market is comparatively tightly regulated. The options for TV advertising are thus more limited in both quantitative and qualitative terms and are significantly more restrictive than in the US, for example. For instance, airtime for TV advertising is restricted to a maximum of twelve minutes per hour in Germany.

At the same time, public broadcasters in Germany have a high budget at their disposal: As in many other European countries, their financing is guaranteed by law but their budget from TV license fees is extremely high (Fig. 062). These broadcasters finance around 20 TV stations and around 60 radio stations with a total income of EUR 9.3 billion. Private providers mainly generate revenues from advertising and operate over 290 TV stations and around 270 radio stations with a budget of EUR 10.7 billion (as of 2016).

Private providers are currently excluded from public funding. However, ProSiebenSat.1 makes an important contribution to basic provision of media, particularly among young target groups. In this context, ProSiebenSat.1 stepped up the debate about further development of the dual system in 2017. The proposal for “Media Regulations 4.0” is intended to promote content and open up funding to others instead of just public institutions. Politicians have already recognized that reforms are needed. One initial step was the directors’ proposals for structural reform of public broadcasting. Sustainability

062 / Public TV Budgets of Different Public Broadcasters in Europe in EUR bn

Public TV Budgets of Different Public Broadcasters in Europe (Bar chart)

1Adjusted to German price level, based on Eurostat price level data, 2016.

GER: Income from contributions, not including Deutschlandradio and ARD radio share.

ES: Government subsidization, including mandatory contribution of private TV stations (3% of revenues for free TV and 1.5% for ) for RTVE and autonomous station.

Source: IHS, KEF, UN, DigitalTVeurope, McKinsey analysis.

The dual system has started to exhibit a financial imbalance, as public broadcasters’ income from TV license fees has been increasing continuously in recent years and they additionally fund themselves via advertising. Furthermore, new market players are emerging as a result of digitization and competition with global providers is becoming more intense. ProSiebenSat.1 has a positive attitude towards this development and has identified numerous growth opportunities in this dynamic market development. However, fair competition rules for all companies accompanying this digital economic transformation are a key element for successful sustainable development. This includes consistent standards on issues such as youth protection and copyright, as well as adequate promotion of the European digital industry. Risk Report

It is important that the legislators support private operators in shaping the digital transformation. We are approaching this topic strategically by ourselves and are forming alliances. One example is the Log-in Alliance, which ProSiebenSat.1 initiated together with Mediengruppe RTL Deutschland and United Internet. The aim is to offer users a simple and secure solution that gives them access to all of the initiative’s Internet services across different sectors. In this way, we are generating added value for all market participants and establishing standards to strengthen the local digital market.

The digital development confronts us with completely new challenges: More and more people, especially young people, are using the Internet as a source of political information. Users search for information online and are presented with results that confirm their opinions. Algorithms then reinforce this bias, resulting in an individual echo chamber. Our shared social horizon is becoming more isolated. As media companies, we must counter this development with content. “Media Regulations 4.0” offers an effective and also realistic approach for adapting the dual broadcasting system to the conditions of a digital society: By promoting relevant content, we provide a reliable counterweight to an algorithm-based media landscape. Objective reporting and contextualization form the basis for diversity in the media and diversity of opinions.

Dual broadcasting system
A dual broadcasting system means the concurrent existence of private and public broadcasters. The most important difference between the two broadcasting systems is in the form and purpose of the organization. The duty of the public broadcasting organizations, with the main stations ARD and ZDF, is the “basic provision of the population with information.” Their financing is guaranteed by law and provided by license fees. The private providers operate as independent commercial enterprises, obtaining most of their revenues from marketing advertising.
Pay TV
Television programming that can only be received if additional fees are paid. Special equipment (a decoder) is usually required.