Television in Germany: The last redoubt

Television in Germany
The last redoubt
Another push to sell pay-television to the Germans

Jul 29th 2010 | Bonn

THERE are plenty of things to buy in a German supermarket, but little that is truly appealing or expensive. So it is with German television. Dozens of free channels carry a mixture of home-grown stuff and dubbed Hollywood imports. They strike most people as good enough. As many investors have painfully discovered, it is perhaps harder to sell pay-television in Germany than in any other rich country. Yet they keep trying.

In a sense, Germans do pay for television. Public broadcasters levy compulsory fees of €18 ($23) per month on every TV-owning household, a quarter more than Britain’s BBC. Many viewers also receive free television via satellite or cable. Analogue cable connections are cheap—about €10 per month—and often bundled into apartment rents. Only 5.4m households plump for true pay-TV, according to Goldmedia, a consultancy. That works out to less than 15% of all television-owning homes. In America, it is more than 85%.

It is difficult for a pay-TV distributor to monopolise sports rights—the battering-ram that was used to push satellite television in Britain and Italy. The Bundesliga, Germany’s football league, sells cable, satellite and internet rights separately. And if Germans cannot get live games for free, they simply wait for the highlights.

Pay-TV firms are oddly optimistic in the face of repeated defeat. A year ago Rupert Murdoch’s News Corporation acquired a controlling stake in Premiere, an ailing satellite television network, and relaunched it as Sky Deutschland. A few months later John Malone’s Liberty Global bought UnityMedia, a cable firm. Deutsche Telekom, which offers pay-TV over internet connections, said this spring that it planned to sign up 2.5m-3m paying customers by the end of 2012 (it now has 900,000). Three different pay-TV technologies are thus competing for viewers. A single hope underlies all of them: if Germans will not pay for caviar, perhaps they will buy a nice tin.

Rather than charging top euro for delicious content, pay-TV distributors are trying to hook Germans on technology. They are offering digital video recorders that allow subscribers to pause and rewind live programmes and record an entire series with a single click of the remote control. They are pushing libraries of on-demand films to save people a trip to the video store, and electronic programme guides to make channel-surfing easier. Some are offering a greater range of high-definition channels. Such things are old news in other rich countries. In Germany they seem so radical that Christian Illek of Deutsche Telekom feels the need to show your correspondent how they work.

In other countries digital video recorders and other technologies are add-ons to pay-TV packages stuffed with desired content. They have never before been the main offering. If German firms can sell them they will no longer be the media world’s laggards but its pioneers. They can take comfort in one thought: consumers ought to have plenty of money left over after shopping for groceries.

While I find that this article makes us Germans looks like cheap bastards (which we're not, we're cheap but not bastards) it is interesting. TV is basically free over there and commercial time is limited, so people don't really have the urge to pay for TV when they basically show the same stuff just commercial free. The pay-channels show newer movies and are commercial free, but many people don't want to buy 40-70 Euros a month just to see a movie on TV without commercials. It's just really not worth it because commercial time is not THAT bad.
Of course you can't really compare German TV with American TV, since American TV has plenty of local channels where German TV doesn't.
How is it in Britain? Do they have local channels there?

We pay a license fee, which funds BBC services only. Then we have the commercial television stations: ITV, Channel 4, Channel 5 which are all available with a standard aerial. Although these extra channels are free (paid for through advertising), you still have to pay the license fee.

Next step up is "Freeview". You buy a digital box for a whole load of extra channels. Once you have bought the box you don't pay out any more money, hence "Freeview".

Then we have BSkyB, the satellite broadcaster and Virgin Media and other Cable services which you have to pay a monthly subscription for. The article is right in saying that exclusive sport coverage helps to keep Sky and Virgin in business, but quite a number of flagship sport events are now legally protected that those services cannot have exclusive coverage (FIFA World Cup, The Ashes, Rugby World Cup, Wimbledon, The Grand National and a few others).

Furthermore, the rights to broadcast sporting events are renewed every few years. Neither ITV not the BBC can compete with Sky generally but they do have the legal right to show highlights. So Sky might show 4 Premiership games on its sports channels on a Saturday, but in the evening the BBC can show the highlights.

Since I haven't lived in Germany for a while, I don't know about sporting events but when I still lived there important games could be viewed on a channel that everyone gets, not only on the pay channel.