Private Television

This is actually about another article in Brand Eins. 20 years ago, nobody believed in private television in Germany and the RTL Chief Dieter Thoma was happpy that the screen was filled and had moving colours. The good thing was that ad-spots in public TV were so filled up that the private TV stations were removing the artificial scarcity of that resource. Today, 20% of advertising money goes to TV and 90% of that ggoes to the private channels (print is at 40%). RTL made 1.3 billion USD in 2002 in advertising. 12000 fixed and 4500 free employees work at private TV stations, excluding all the content providers.

If you placed 6 spots on ARD and ZDF in the 70s you had a read of 70%, while today you will only get 50% when doing the same through all channels. Statistically viewers switch channels 63 times a day.

With digital TV coming in via the standard antenna, for free, soon, the amount of channels will likely increase, making special channels possible that cater to special audiences. But how to be profitable when most TV channels now aren’t? The integration of the entire value chain from fan magazine to CD and TV and Cinemae gets more important. New systems allow for users to pay for the show with the first installement of the UK Pop Idol having 35 Million callers. In germany this would have produced roughly 17 Million EURs in revenue, of which some go to the technology provider but still.

The new german channel 9Live takes all of this a step further, resulting in operational profits in 2003 close to 30 Million EURs. What they do is, for example, simply show you two pictures, asking for the error in one. you can then call and potentially win money, if you get through, and get the right answer. Simple quizes with annoying hosts, produced for next to nothing, making people get high phone bills. Now lots of people believe that 9Live is just a fad but they presumed as much with private television. Thanks to Peter Laudenbach for the article.