Benedikt Frey: Samsung TV Plus To Become A Premium FAST Service

Mr. Frey, FAST is on the rise. Has the subscription model had its day?

Benedikt Frey: I don't think the subscription model has had its day, even if you can see a slight decline in the figures for subscription-based streaming services. At the moment, many consumers are being more sensitive with their spending. Instead of five streaming subscriptions, it may only be enough for one or two. But that doesn't mean that subscriptions have had their day. Rather, I believe that the different models can coexist: linear and non-linear television, pay and free TV, subscription and ad-financed video services. The fact that new services such as Paramount+ are coming onto the market also shows that the subscription is far from obsolete. Advertising in streaming is not new; providers such as YouTube have been around for quite a while.

Why is FAST growing so quickly at the moment? Are there other reasons for this, apart from the fact that there is less money in the wallet due to inflation?

Frey: With Samsung TV Plus, FAST channels are deeply integrated into the TV, whereas YouTube also takes place on the TV set, but is probably aimed more at consumption on mobile devices or PCs. Samsung TV Plus, on the other hand, serves lean-back consumption. According to recent studies, consumers sometimes spend around 30 minutes searching through streaming content until they find what they want to watch. If you extrapolate this to the week, it adds up to a lot of time in which you could have already sat back and enjoyed the TV content. In this search, most consumers end up back at their preferred genre anyway. That's why we have so-called owned and operated channels on Samsung TV Plus, such as our “Comedy Mix”. So if you want light and funny fare, you don't have to look far at Samsung TV Plus.

Owned and operated channel means that Samsung curates the content, whereas the other channels are bought in as a whole by Samsung TV Plus?

Frey: Yes, exactly. “Owned and operated” refers to the classic license deal for content that we curate for a channel that we brand. In the case of “third party channels”, as we call them, or the classic FAST channels, the partner delivers a finished channel to us and we then share the advertising revenue; we don't make any acquisitions.

Benedikt Frey: Samsung TV Plus focuses on content-specific channels

What does Samsung TV Plus offer for Germany look like? What content do you show?

Frey: In Germany, Samsung TV Plus comprises over 100 channels covering all genres. Our flagship channels, i.e. the six owned and operated channels, are the documentary channel “Wilder Planet”, “Crime Mix”, “Entertainment Mix”, “Cine Mix” with seven free TV premieres last year and “Terra X”, for which we received the content and naming rights from ZDF. The naming makes it clear that we are designing the channels to be very content-specific, so that it is immediately clear to consumers what content they can expect on which channel. And since November 2022, “Comedy Mix” has been added, with content from NBC Universal such as “The Office” or “30 Rock”. This content was previously only available on pay services.

With DAZN, you have had another partner at your side since December, which was previously only active behind the paywall.

Frey: DAZN FAST is also available on other platforms, but for DAZN FAST+ we offer exclusive sports content from DAZN: live soccer from Seria A, Ligue 1 and La Liga with the best teams in each league. In addition, we will be showing pre-match coverage of the Champions League matches broadcast by DAZN, produced exclusively for Samsung, as well as a post-match summary with all the goals and highlights -  also produced and branded especially for Samsung TV Plus. We are thus following up our announcement from summer 2022 with action: Samsung TV Plus is to become a premium FAST service. We want to push this further in 2023.

Will Samsung TV Plus then also produce content itself or acquire rights to films, series or sporting events that have so far been the domain of SVoD providers?

Frey : It is still too early to think about such things in the sports sector. As far as license costs are concerned, premium sports such as Formula 1 or the German Football League have not yet reached the FAST area. This is still the domain of the big broadcasters, although you can also see that some are saying goodbye to such rights. With Sportdigital, Motorvision and Red Bull TV, we already have a broad sports offering. We will certainly expand this even further.

With regard to originals, i.e. content produced in-house: This is being discussed with Samsung TV Plus. It would probably also be negligent not to think in this direction if you want to position yourself strategically correctly. Whether and, if so, when and how we will tackle the topic of originals has not yet been decided. We will certainly need experienced studios or producers to meet our quality standards.

Amazon and Netflix have already launched an ad-financed subscription model in Germany. Aren't the SVoD providers cannibalizing each other with such offers?

Frey: The aforementioned VoD providers are strong players, even if their growth is no longer quite as steep as it was in the beginning. In my opinion, however, not everyone in the streaming market will find enough subscribers to survive in the long term. Then aggregation models such as those offered by Sky or Deutsche Telekom could be a solution.

In the pay TV sector, we have already seen pay channels enter the German market in the past and then disappear again. This kind of coming and going could also develop in the streaming market, for example if providers want to test individual European markets first. We have also launched Samsung TV Plus in selected markets.

Collaborations: Consumers are best reached together

As a device manufacturer, Samsung is entering the content provider market with TV Plus. Do you expect a backlash from content providers coming up with their own end devices? After all, it's all about contact with consumers.

Frey: The first announcements of a backlash have already been made. However, a certain amount of expertise is required to produce TV sets, just as a certain amount of expertise is required to become a content provider. Most content is currently already accessible via a subscription (SVoD) or via an app on the smart TVs available on the market. We offer access to all existing content on Samsung Smart TVs.

From our own experience as a global technology provider, innovation driver and market leader in smart TVs, we know that the barriers to entry in the TV market are very high. The development of competitive smart TVs requires a great deal of time and high investment, which must be invested in research and development alone. The subsequent process is accompanied by trial and error, i.e. further rounds of financing, commitment and, above all, time.

We are also observing, also on the basis of market research data, that niche devices such as set-top boxes are being used less and less, particularly in Germany. In the foreseeable future, they will probably disappear from the market altogether. In some cases, the connection of games consoles is already being reduced, as we have direct access to console games via the Samsung Gaming Hub on our smart TVs. But that's just by the way.

Even though I personally always find such ideas exciting, in the end it's always the consumers who decide and they will have to ask themselves whether it's really worth buying a new TV in view of the additional services it opens up.

It doesn't have to be a competition. You could also cooperate with a content provider to develop a TV with the provider's name on it and Samsung technology running inside.

Frey: Absolutely. I mentioned this at the beginning: the triad of broadcast, FAST and SVoD works well together. That's why we are very open to cooperation, as are many other companies in the market. Ultimately, we want to reach all consumers who want this or that. Perhaps the best way to reach them is together.