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ProSiebenSat.1 launches ‘vertical content division’ for mobile

German broadcaster ProSiebenSat.1 has launched a new ‘vertical content division’ or VERT as part of its Studio71 digital content unit to provide mobile content in the 9:16 format for consumption on mobile phones.

ProSiebenSat.1 said that the vertical format was in high demand on platforms such as Instagram and Snapchat and among young target groups and advertisers, and cited a forecast by eMarketer that global advertising budgets on Instagram alone are set to increase by 130% to €18.1 billion over the next two years., fuelled by the InstagramTV feature launched in June.

According to the broadcaster, VERT will offer “a full-service range for the implementation of successful influencer campaigns for all brands seeking to present their messages in a high-quality form in the aesthetic world of Instagram”, including developing creative concepts, placing influencers, producing branded entertainment formats and fine-tuning campaigns. The unit will lean on Studio71 talent such as Erik Scholz and Germany’s Next Top Model winner Trixi Griese.

Instagram currently has around 15 million active users in Germany, who consume roughly 30 minutes of Instagram stories and IGTV videos in the app each day, according to the broadcaster.

Eun-Kyung Park, chief digital officer entertainment at ProSiebenSat.1 said: “Studio71 is already among the world’s leading influencer and creative agencies. With VERT, we will achieve further growth in this segment. Studio71 generates around ten billion video views each month. By making use of new technical features, we are establishing additional distribution channels and continuing the success story of Studio71.”

Sebastian Romanus, managing director of Studio71, said: “Many marketing departments have already had positive experiences with influencer marketing but are hitting their technical limits when it comes to high-quality productions. As a first mover, VERT caters to a growth market that is still in its infancy but for which there is already strong demand.”

Separately, analysts at Berenberg have reiterated a ‘buy’ rating for ProSiebenSat.1 at a reduced price target of €24 following the broadcaster’s downgrading of expectations for this year as a result of lower than expected revenues and the renegotiation of licensing rights from US suppliers.

According to the analysts, the broadcaster’s assurances that “it intends no more bad surprises” could imply “some upside to the overall picture that has been presented”.

ProSiebenSat.1 has written down the acquisition of US programming rights acquisitions as it turns to focus on locally-sourced programming, taking a €400 million hit on its profit and loss that Berenberg says will translate into a cash hit of €100 million spread over four years, with €80 million extra to be spent on local content next year.

“[ProSiebenSat.1 is taking its medicine, and this makes the patient look more poorly in the near term. However, we think these changes will create a healthier business in the medium to long term, which should support solid returns from here,” said Berenberg.