Market Insight

ProSieben's 7TV platform adds Discovery channels

October 26, 2017

Max Signorelli Max Signorelli Research Analyst, Media & Entertainment

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Discovery Communications and ProSiebenSat.1’s joint venture has begun with the addition of Discovery’s DMAX and TLC channels to 7TV, ProSiebenSat.1’s aggregated catch up and live streaming service. Accompanying these channel additions is a removal of the pay wall required to access the live TV through the 7TV mobile app. A subscription previously cost €2.99 per month with a one-month free trial. Catch up access has always been and remains free of charge through both the 7TV app and the website.

Launched in June 2014 and April 2015 respectively, the 7TV app and website offered all seven of ProSiebenSat.1’s free-to-air TV channels to German viewers. The app is also available in the Austrian and Swiss markets as of the end of 2015 with regional ProSiebenSat.1 channel offerings. Neither of these has received the additional Discovery channels.

Our analysis

Prior to the addition of Discovery’s channels, the 7TV mobile app faced some stiff competition. At launch, the live access to TV channels 7TV provided as a paid subscription were offered for free by virtual pay TV operator Magine TV. Magine moved these channels behind a paywall in September 2014 but those three months of Magine undermining ProSiebenSat.1’s offering will have impeded 7TV’s launch. Afterwards, for €4 more (€6.99 per month for a Magine TV Master subscription) viewers could access all of 7TV’s offerings as well as additional RTL, Discovery and international channels, leaving the 7TV app simply as a discounted option for viewers only interested in ProSiebenSat.1 channels.

More recently, ProSiebenSat.1 has provided the competition itself though the release of TV live streaming apps for each individual ProSiebenSat.1 free-to-air channel in late 2016. These apps offered the same live TV options as a 7TV subscription free of charge. At that point, the 7TV app became simply a paid aggregate source for all of ProSiebenSat.1’s channels. To this point, the removal of the subscription fee makes sense to spread the new service’s reach and to establish itself as a new hub for content of all types.

Nowadays, virtual pay TV operators Zattoo, Magine TV and TV Spielfilm all offer livestreams of ProSiebenSat.1’s channels as well as Discovery’s DMAX and TLC channels as part of larger subscription packages all priced at around €10 per month. In addition, competing broadcaster RTL centralised their TV catch up services into the TV NOW freemium service in March 2016, providing livestreams and catch up of eight RTL channels for the same price as 7TV. Unlike ProSiebenSat.1 however, there is no individual channel alternative to TV NOW and all customers must go through this new platform to access RTL content. ProSiebenSat.1 and Discovery are unlikely to follow this example as they work to differentiate the 7TV through its new content mix.

This channel addition is just the beginning of ProSiebenSat.1 and Discovery’s joint venture in the German markets. Plans to expand the 7TV offering include Discovery’s 2015 acquisition Eurosport, adding a new ‘Eurosport Zone’ to provide users with sports highlights. It has not been established however if the integration will go further, perhaps extending to the Eurosport Player application. This deal is by no means exclusive though; Discovery has already made itself available on a number of other platforms including Sky Deutschland and as part of Amazon channels.

IHS Markit believes the subscription pay wall is likely to return to the 7TV app in the near future with the arrival of more Discovery content. Although removing the subscription fee will help expand the service’s reach for now, how many customers will stay considering the alternatives in the market is less certain. While the individual alternatives for the ProSiebenSat.1 channels still exist, it will be difficult for 7TV to differentiate itself without a more significant addition of Discovery content.

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