MUNICH (Reuters) – German broadcaster ProSiebenSat.1 Media will launch its streaming joint venture with Discovery Inc, on June 18, with a premium version planned to go live in the coming winter, CEO Max Conze said on Wednesday.
The venture, called Joyn, is a key plank of Conze’s strategy to turn around the fortunes of ProSieben as it battles weak advertising on its commercial channels and digital platforms like Netflix lure away younger viewers.
Yet, Conze warned investors, Joyn will generate initial losses of around 100 million euros ($113 million) – split equally between the partners – and is expected to take years to turn a profit.
“We expect Joyn to achieve break-even in four to five years,” he told ProSieben’s annual general meeting in Munich.
Joyn – a mashup of ‘joy’ and ‘join’ – will be funded by advertising at first, and will host around 50 channels. These include public broadcaster ARD and Discovery’s Eurosport, with many already available on cable in Germany.
The premium version of Joyn, expected to go live in the winter, would put ProSieben head to head with Netflix and Amazon Prime on subscription video-on-demand, where the U.S. streaming giants dominate.
ProSieben also said it had signed a cooperation agreement with social network Facebook to post clips on video platform Facebook Watch as it seeks to reach a younger audience.
The cooperation – due to take effect on June 27 – would increase ProSieben’s reach and generate additional revenues in its content and production business.
Conze told investors TV advertising remained the company’s biggest challenge but reiterated his confidence in meeting his annual earnings guidance for this year.
Shareholders, who have seen more than a third wiped off the value of their holdings in the year since Conze joined from UK appliance maker Dyson, criticised executive compensation as too high.
Supervisory board chairman Werner Brandt was re-elected with a only 82 percent of votes cast, down from 97 percent when he was confirmed in the post in 2015, reflecting frustration at the company’s performance. ($1 = 0.8833 euros)
Reporting by Joern Poltz; Writing by Douglas Busvine; Editing by Thomas Seythal