Germany broadcaster ProSiebenSat.1 this morning announced it is cutting around 400 full-time jobs as part of a restructuring, which will see streaming platform Joyn become more and more of a focus within the business. Bert Habets, group CEO of ProSiebenSat.1 Media, described the cuts as “a difficult but entrepreneurially necessary decision, so that ProSiebenSat.1 can increase its earning power and grow sustainably and healthily again”.
The company suggested that the restructuring is not just down to economics, but partly as a result of its streaming-heavy strategy. “In a constantly changing media industry, it is only logical that we have realigned our strategy and are constantly questioning our own positioning,” said Habets. The company said in a statement that the realignment would create a more efficient structure, a competitive cost base, and “processes clearly geared towards digital transformation”. And Habets added that the new structure would create headroom for new investments – which presumably would be geared towards Joyn.
But economics is certainly a major factor. Habets spoke of ProSieben facing “an extremely challenging economic environment for the fourth year in a row”, which has made it imperative that ProSieben “significantly” cuts its material and personnel costs. The job cuts are expected to result in cost reductions in the low double-digit millions this year, and mid double-digit millions in 2024.
And a driving factor behind the pivot to streaming has been the need to compete with international subscription video on-demand (SVOD) platforms, which has put pressure on broadcasters’ audience figures and ad revenues.
ProSieben hasn’t outlined in which parts of the business the job cuts will be made, but says it will offer voluntary redundancy programmes to avoid compulsory redundancies as far as possible.
Rebirthing pains
ProSieben has been one of the more active broadcasters in Europe in terms of responding to audiences’ shifts to streaming, and putting streaming front and centre of its growth strategy. Today’s news underlines how making this sort of strategic pivot isn’t a pain-free process.
Nordic broadcaster Viaplay, which arguably pushed even harder into streaming by rebranding the entire business around its streaming platform, and rolling out its streaming service into foreign markets, has also had its own troubles recently. Viaplay has withdrawn its outlook for this year and brought in a new CEO and management team, after organic sales growth at the start of the year came in much lower than expected.
