Feature

World Media 2007: Germany

With unemployment falling and exports rising, Europe's economic engine is warming up again, after a decade out in the cold. Could it all be the effect of hosting the 2006 football World Cup?

Germany is back. For more than a decade - since, in fact, the reintegration of west and east began in earnest - the nation has been something of a lost soul, both spiritually and economically.

Arguably, the catalyst for rebirth was the World Cup, hosted by Ger-many in 2006 for the first time in 32 years. This was a huge home success, not so much in a footballing sense (Germany were comprehensively beaten by the eventual winners Italy in the semi-finals), but for the fact that the tournament was responsible for an upsurge of guilt-free nationalism for the first time since 1945.

And it also coincided with an upswing not just in consumer confidence but, more importantly, in underlying economic performance. One of the most important positive indicators is unemployment, which had reached more than five million, or 12 per cent of the workforce, in 2005. Across 2006, the figure declined steadily, ending the year significantly below four million - and the trend looks good for 2007. Exports are up and growth in GDP is expected to top 2.5 per cent in 2008.

As if to symbolise a return to its role as the engine of European economic growth, Germany has not only assumed presidency of the European Union for six months from 1 January but will also host a G8 summit in June.

There are still grumbles, of course. When Angela Merkel, Germany's first female chancellor, assumed office in November 2005, she promised to cut taxes and force through a programme of economic reforms. The reforms have failed to materialise and taxes, especially VAT, have actually risen.

For media owners and the advertising economy, 2006 contained mixed blessings. Any upturn has to be welcomed, of course, but there was no private sector World Cup windfall - largely because the state-owned channels ZDF and ARD carried all the best games and consequently increased their audience share.

This was perhaps the final straw for the owner of ProSiebenSat.1 Media, the US media mogul Haim Saban. Saban bought ProSiebenSat.1 in the belief it could achieve dominate the German market, but although the group as a whole came to rival the audience share of the RTL Group, neither Sat.1 nor ProSieben ever mounted a serious threat to the country's leading commercial channel, RTL1.

In December, Saban sold a controlling stake to investment funds, KKR and Permira, in a deal valuing the group at $7.9 billion.

ADVERTISING EXPENDITURE
USdollars million at current prices. All years based on US$1 =
EUR 0.80 *Estimated
Total News- Maga- TV Radio Cinema Out- Online
papers zines door
2000 24,867 10,813 5,948 5,857 912 218 928 191
2001 22,969 9,663 5,517 5,558 843 212 945 230
2002 20,904 8,711 5,163 4,921 740 200 887 282
2003 19,875 8,099 4,927 4,740 720 200 883 306
2004 20,129 8,294 4,851 4,801 769 183 896 337
2005 20,369 8,284 4,838 4,888 826 164 956 413
2006 20,764 8,377 4,923 4,968 827 165 968 536
2007* 21,096 8,422 4,990 5,034 837 167 988 659
2008* 21,383 8,460 5,014 5,082 847 170 1,011 799
2009* 21,756 8,507 5,082 5,144 857 172 1,035 959

Adspend notes 1) Excludes agency commission of 15 per cent. 2) Excludes
production costs. 3) Includes classified advertising. 4) After
discounts.

FACTFILE
HIGHEST CIRCULATING TITLES
Newspaper: Bild (daily, 3,540,000 copies)
Business magazine: Guter Rat (monthly, 327,000 copies)
Consumer magazine: rtv weekly, 7,900,000 copies)
TOP TV SHOWS
Most-watched TV programme: Data has been withheld by AGF/GfK
Best new TV format: Post Mortem, a German take on the CSI formula
MAJOR MEASUREMENT TOOLS
Circulation: MA
Readership: Presse
TV viewing: AGF/GfK
MAIN MEDIA OWNERS
Newspapers: Axel Springer, WAZ
Magazines: Hubert Burda, Gruner & Jahr, Axel Springer
TV: RTL, ProSiebenSat.1

THE LOWDOWN

- Media topic du jour

The gathering momentum behind Web 2.0.

- Reigning media guru and why

It has become fashionable to answer "the German consumer" to this one.

- Media mogul to be seen dining with and why

RTL's chief executive, Gerhard Zeiler, still the most powerful man in German television.

- Car to drive: Mini.

- Phone to carry: Sony Walkman Handy.

Whatever you do, don't say: Angela Merkel and George W Bush seem to be getting on rather well ...

BUZZ MEDIA IDEA OF 2006

From an advertising point of view, the Fifa World Cup didn't quite live up to the more optimistic pre-tournament forecasts. But get it right, as Puma did, and the rewards were there to be had, especially when a genuine mood of patriotism swept the country once the tournament started.