Despite initially losing the key soccer (Bundesliga) rights in Germany, pay-TV operator Premiere has bounced back in style, ending 2006 with a subscription base totalling just shy of 3,410,000 million. Despite the soccer contretemps, Premiere still added subscribers in the fourth quarter of last year, adding just over 36,000 customers in a strong performance according to Michael Schatzschneider, a media equity analyst at Commerzbank.

He said "remarkably, they have made a net increase in subscribers of 36,000, which is substantially above the 14,000 I expected, as well as well above market expectations. Their performance in the fourth quarter and full year 2006 was fine. It has to be pointed out, though, that the ARPU figure was pretty weak with a drop there, quarter on quarter. However, on the plus side, they performed strongly over the Christmas period, focusing not on the Bundesliga, but on a new package structure which emphasized family programs and movies. They executed very well on their Christmas marketing plans. Premiere is much more than just the Bundesliga."

What the results did show is that a lot of people dramatically overplayed the impact of Premiere’s losing the Bundesliga football rights. Schatzneider admitted "the importance of football content has been dramatically overplayed in Germany."

A discussion with analysts last year saw them predicting heavy subscriber losses for the operator after Bundesliga took its game elsewhere.

In January 2006, following the announcement, media equity analyst Christian Schindler of Landesbank Rheinland Pfalz told Satellite News sister publication Inside Digital TV that "in the worst case scenario, they could lose a million customers. But, while I think losing 1 million is possible, I think it is more realistic that they could lose 700,000 customers, which is 20 percent of their subscriber base."

Overall for 2006, Premiere lost only 156,000 subscribers, which represents around 4 percent of its overall subscriber base. Such results have proved that the importance of premium soccer content did not spell a doomsday scenario for Premiere.

Ironically, at the same time that Premiere has shown there was life after the Bundesliga, it then did a deal with Unity Media, which will enable it to start screening the Bundesliga to satellite subscribers. The deal with Unity Media is a far-reaching one, and will see Premiere able to distribute via satellite all of Arena’s (a Unity Media subsidiary) current and future pay-TV sports channels and programming, including Arena’s current Bundesliga programming. As part of the same deal, Unity Media has boosted its content offering to cable customers by securing long-term distribution of all Premiere’s content to its cable customers in Hesse and North Rhine Westphalia starting with Premiere blockbuster, Premiere Entertainment, Premiere Sport and Premiere Fussball.

Schatzschneider hailed such machinations as he commented "this deal confirms that Premiere will remain the most significant provider in the German pay-TV market. Arena has abandoned the pay-TV model. They are refocusing on the business model of being a cable infrastructure provider. Strategically, it was a very important deal, although it was not a bargain for Premiere. I would say it is a sensible deal for both parties. Unity Media can reduce the losses occurred through buying these expensive soccer rights. Premiere is repositioned to where it was in 2005, covering the whole of Germany with premium content."

Ian Whittaker, a media equity analyst at UBS, wrote in a research note that "the deal effectively signals an end to competition with Unity Media, and Premiere will now be able to offer Bundesliga across satellite, the majority of cable homes, and DSL. Benefits will be stronger pay-TV growth, higher ARPU, a simple and clear proposition for consumers, and less competition for content. Premiere will also manage Arena’s satellite platform for which it will receive a revenue share. Importantly, the deal helps to allay concerns about Premiere’s longer-term future with Premiere positioned as the platform-neutral provider of premium pay-TV services in the German and Austrian markets."