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Styleguide Prosiebensat.1 Media AG Creating new growth CMD 2014 Content Production & Global Sales – Jan Frouman ProSiebenSat.1 Media AG | October 15, 2014 | October 15, 2014 Page 1 Red Arrow cordially welcomes you to today's presentation Red Arrow Reel | October 15, 2014 Page 2 What is Content Production & Global Sales? Content Customers Content Production = developing scripted & non- scripted ideas and producing finished program Global Sales = selling group or 3rd party finished tape & format ideas to channels and platforms around the world | October 15, 2014 Page 3 Key market trends Market Ongoing and active market consolidation and M&A activity consolidation (e.g., Shine / Endemol, Discovery / All3Media, ITV) Rights Rights retention is becoming more challenging and competitive in key markets retention (e.g., US, UK) Deficit Distributors are increasingly aggressive with deficit financing and minimum financing guarantee commitments (e.g., Fremantle Media, Shine, etc.) English-language Growing appetite for English-language scripted product (e.g., Netflix, Amazon, scripted product Hulu, and more than 65 channels in the US are commissioning scripted product) International The US is becoming a more viable home for acquired, internationally co-produced, scripted product or reformatted scripted product (e.g., Lilyhammer, Broadchurch, etc.) Growing exploitation of own portfolio in own digital environment, and direct Digital push brand relations for classic TV and digital | October 15, 2014 Page 4 Red Arrow has become a credible player in the European TV distribution business Total broadcaster income related to On air format hours by distributor (Europe) distributor’s formats (Europe) [in FY 2013] [in FY 2013; in USDm] Endemol FremantleMedia 559 4,352 ITV 589 ITV Endemol Shine 130 BBCWW 12,802 3,460 FremantleMedia 144 Talpa Red Arrow 439 Shine 147 All3Media 3,136 Other* 148 Red Arrow 153 298 Sony 2,676 1,936 154 169 Zodiak Other *Other incl. Zodiak, All3Media, Eyeworks and Talpa. | October 15, 2014 Page 5 Source: Madigan Cluff, Essential Television Statistics and Digital TV Research; Statistic measuring the number of hours of formatted programming scheduled across European free-to-air channels and the income generated by each format (financial benefit sourced by activities such as advertising revenues or a proportion of annual household license fee income that broadcasters receive from screening these formats) Red Arrow’s growth strategy since 2010 Founded 2010 Since 2012 Since 2013 From 2014 Further geographic Footprint in key Consolidation and expansion / Build scale through P7S1 territories continuous portfolio development identified growth established through optimisation through creative initiatives (e.g. boutique Strategic focus on partnerships digital), strategic acquisitions and mature businesses including SYNC partnerships and start-up and key TV markets Media, Screenz, selective investments (US & UK) STV and One Three acquisitions Media | October 15, 2014 Page 6 Powerful footprint: 13 production assets and one MCN across 7 territories, with multiple creative partnerships SE/DK/NO D/AU UK (1) (1 ) China West Coast East Coast IL UAE (1) (1) | October 15, 2014 Page 7 1 Note: Commercial Partner Strong growth in the biggest TV market in the world • Married At First Sight • Break-through in (FYI) • Say Yes To The Dress scripted: Odd Mom Out • Midnight Feast (FYI) • Comedians (FX) • Little Women S. 13 (TLC) (Bravo) • POV Killer (Lifetime) • Bosch (Amazon) (Lifetime) • The Big Day S. 3 (TLC) • Mob Wives S. 5 (VH1) • Mafia Rules (H2) • Odyssey (NBC) • My Man Can (WE) • Driving Vegas (A&E) • Hawaii Life S.3 (HGTV) • The Taste S.3 (ABC) | October 15, 2014 Page 8 Red Arrow’s portfolio is in line with current content trends Real reality Movie stars on TV Viewers are tired of shows that don’t feel Doing TV used to mark a movie star as a has- ‘authentic’. They steer away from reality that is been. Now, when television is so good, even over-scripted and over-produced. the biggest stars land on the small screen! E.g.: Married At First Sight, The One That Got E.g.: Esio Trot (Dame Judi Dench & Dustin Away (Lost In Love) Hoffman), Bosch (Titus Welliver) Scripted Larger-than-life characters Everyone agrees that this is the golden age of Outrageous behavior isn't just a prerequisite, scripted. it's the goal. Larger-than-life personalities in shocking but real circumstances. E.g.: Bosch, Lilyhammer, 100 Code, Odd Mom Out, Esio Trot E.g.: Little Women: LA, Mob Wives Millennials Branded entertainment The millennial generation includes ‘the As millennials become more and more difficult extremely attractive 18-to-34 demo’. Cable to reach through traditional media, brands are networks need to work hard to stay relevant to looking for new and creative ways to engage this group. them. E.g.: Ctrl Freaks, Selfie E.g.: Video Game High School | October 15, 2014 Page 9 KPIs: development, production and sales 2011 2012 2013 2014E Formats in development 250 550 800 900 Development Pitch-ready titles 125 350 500 550 Production Hours produced 650 550 650 900 Titles in the catalogue 500 590 610 710 Sales Hours in the catalogue 7,300 7,900 8,400 10,000 Countries sold to1 130 150 180 200+ | October 15, 2014 Page 10 Note: 2012 volume decrease in produced hours is due to cancellation of German telenovelas; 2014 full year estimates as of July 2014 1 *Incl. sovereign countries and administrative territories Recognized creative excellence Betty White’s Off Their Rockers (Kinetic Content): The Taste (Kinetic Content): Married At First Sight (Snowman Productions DK): • Emmy nomination (Betty White for “Outstanding Host: • Emmy nomination (Anthony Bourdain for • Rose d’Or nomination Reality-Competition Program”) “Outstanding Host: Reality-Competition Program”) (“Reality & Factual Entertainment”) Lilyhammer (Rubicon): A League Of Their Own (CPL Productions): Extreme Fighting (Snowman Productions NO): • Two Golden Nymph Awards (“Outstanding Actor in a • BAFTA* (“Best Comedy Entertainment Programme”) • Gullruten Awards nomination Comedy TV Series” & “Best International Comedy TV Series” • Rose d’Or nomination (“Entertainment”) (“Best Docu/Factual Series”) * British Academy of Film and Television Arts Awards. | October 15, 2014 Page 11 93% of 2015 CMD target achieved, well on track for 2018 target [in EURm] 93% 35% 2010 – 2015 achieved 2012 – 2018 achieved Revenue growth target Revenue growth target 125 100 70% Linear projection of CMD target 116 25% Linear projection 35 of CMD target CMD 2015 target Achievement by Q2 2014 CMD 2018 target Achievement by Q2 2014 | October 15, 2014 Page 12 Key strategies 1 Continue to build scale across key markets (US, UK) Become a leading independent source of English-language 2 scripted product 3 Strategically launch and own global formats 4 Further build digital production capabilities 5 Create, own and monetize “Brands” | October 15, 2014 Page 13 1 Continue to build scale across key markets Continue to be selective about M&A: Make sound judgments about the business and the people running it, the impact on the existing culture at RA and the realistic prospects for an accretive and healthy integration process Identify potential production assets based on the following criteria: • Both established and boutique assets in key markets (US, UK, emerging markets) • Accretive or fair-market valuation multiples • Aligned incentives / partnership model • Industry leading creators and producers | October 15, 2014 Page 14 2 Become a leading independent source of English-language scripted product • Building on the Bosch model, expand RAI‘s portfolio of English-language scripted hit titles and library IP • Aim for smart targeted investments (development, deficit financing) against international distribution rights • Create a new home for leading US show-runners, creators and talent | October 15, 2014 Page 15 3 Strategically launch and own global formats • Establish strategic development partnerships to expand IP creation and feed the group‘s pipeline • Use existing broadcaster relationships as a launch pad for big prime time formats • Co-own and share economics within the P7S1 Group as a whole | October 15, 2014 Page 16 4 Further build digital production capabilities • Be seen as a “digital studio” for next generation creators and talent • Create, distribute and monetize home-grown YouTube channels (à la “Delirium” via Off Their Rockers) • Drive migration from digital to linear and vice versa | October 15, 2014 Page 17 5 Create, own and monetize “brands” Exploit all revenue streams by: • Developing formats with strong ancillary revenue potential (licensing, merchandising, product integration) • Cultivating “global brand management” as a core competence in the group | October 15, 2014 Page 18 Overview: New / upcoming hits and highlights Cooking Social experiment competition Family entertainment movie Crime series Crime series | October 15, 2014 Page 19 Married at First Sight: Record breaking success • Stellar premiere on DR3 Denmark (495% above channel average) • Second season commissioned for main channel DR1 • #1 telecast ever on FYI (prime time season finale 552% above channel average) • 2nd season and spin-off commissioned • Sold to 15+ countries, with further contracts in negotiations Extreme social experiment propelling the dating genre to a new level: Six singles who have failed to find love take their most radical step yet – they marry a complete stranger! | October 15, 2014 Page 20 The Taste: Home-grown global hit format Food-based competition-elimination series First-time
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