1 JUL 2022

The non-stop evolution of the German pay TV and digital video industry

Germany’s pay-TV market declined for a second consecutive year in 2021, with subscriptions down by 459.855, its worst rate of decline to date. Omdia revealed that the country’s main telcos have different approaches for a new business era.


According to Omdia’s recent data, Germany’s pay-TV market declined for a second consecutive year in 2021, with subscriptions down by 459.855, its worst rate of decline to date. On the other hand, OTT subscriptions continued to thrive, with 5 million more subscribers added to reach 45.7 million customers. Deutsche Telekom, Vodafone, and Sky Deutschland, three of the leading telco players in the country, are developing new strategies to cope with a non-stop evolving industry.


Unlike most major pay-TV operators in Western Europe, Deutsche Telekom did not see a fall in subscriptions in 2021, growing by 3.5% to reach 3.7 million customers. Its resistance to this prevailing trend in pay-TV declines was due primarily to its ability to cross-sell its platform offers across its multiplay service. Indeed, its strong broadband growth drove much of this pay-TV uptake, with many customers signing up to its broadband service specifically for its robust bandwidth and competitive price offers while also getting pay-TV as an added incentive.

Although growth in its broadband services played a critical role in its pay-TV uptake, Deutsche Telekom’s core pay-TV features also significantly contributed to its customer uptake in 2021. It was no more evident than its OTT partnerships, which bundle some of the country’s top OTT services, including Netflix, Disney+, and DAZN, with its Magenta TV service, boosting the appeal of its pay-TV service even further.

In 2021, Deutsche Telekom added even more partnerships to its portfolio, signing deals with Apple TV+ and Sky Ticket. Its deal with Sky was particularly notable as it allows to market and bill Sky Tickets on its service for the first time, demonstrating a further willingness to work in alliance with its pay-TV competitors against the growing threat from its OTT competitors. These deals also saw Deutsche Telekom streaming services added to its partners’ set-top boxes, with MagentaSport added to Sky Q and MagentaTV added to Apple TV 4K box. It also enhanced many of the deals it had signed in 2020, with Disney+ and RTL+ bundled together with Magenta on various pay-TV offers. Indeed, the latter paid off spectacularly for RTL+ in the first quarter of 2022, with the OTT provider growing its customer base by 84.6% to reach 3.172 million subscribers: a clear demonstration that OTT players benefit as much as pay-TV services in such partnerships.

Although Deutsche Telekom’s investment in the country’s sports competitions is comparatively low in comparison to its two main rivals in Sports, DAZN and Sky, MagentaSports service does hold two of the country’s top league competitions (Deutsche Eishockey Liga, Basketball Bundesliga) and several lower league tournaments (3. Liga, Euroleague, Oberliga), making it a vital service for a small number of sports fans. To provide its customers with the top sports competitions, however, it has made partnerships with DAZN and Sky an integral part of its subscription service. MagentaTV customers also no longer had to pay for an annual subscription all at once but monthly via the Telekom bill. This deal follows from the first partnership deal it signed with DAZN in September 2020, with Deutsche Telekom using the new partnership to build up its sporting portfolio, having already secured domestic rights to the UEFA Euro 2024 tournament and the 2022 World Cup.


Vodafone’s pay-TV subscriber base declined for another consecutive year in 2021, with customers down by 1.9% (254,000). Its revenue base, in contrast, continued to increase, with profits up by 11% to reach 3.2 billion. Both short-term and long-term issues account for the decline in Vodafone’s 2021 pay-TV base, with the then-ongoing effects of the COVID-19 pandemic reducing its retail activity in the first half of the. Also, a decline in broadband growth, brought on by complications resulting from compliance with new telco legislation and the cancellation of bulk contracts, led to a decrease in subscribers. New OTT players’ continuous growth and launches have led to less take-up of their TV services.

A prime focus for Vodafone over the past two years has been integrating its cable service, Unitymedia, which it acquired in 2019. In February 2020, the brand switched to Vodafone, followed by network coupling and the standardization of its products. In the second half of 2020, it harmonized its TV portfolio, expanded its partnership deal with DAZN, and converted Unitymedia’s Horizon customers to its GigaTV STB service in 2021.

Despite continual declines in its TV base, Vodafone implemented several initiatives to boost its TV subscriptions in late 2020. These include two new deals with DAZN, which saw the OTT service added to its GigaTV service and integrated into its TV bill, and a contract with Apple, which made its GigaTV service available to Apple’s customers on Apple TV’s 4K. These initiatives continued in 2021, with Vodafone signing two more OTT partnerships with the newly launched OTT service RTL+ and the yet-to-be-released Discovery+. Vodafone also signed a deal with Facebook in 2021, making it the first telco provider in Europe to include the social network’s streaming service Facebook Watch on a set-top box.

Alongside these partnerships, Vodafone enhanced its bundled offer in Q4 2021, offering a GigaTV tariff that includes Netflix, with a proposal that costs two euros less than a standard subscription. Vodafone expanded its partnership with Amazon Prime in Q4 2021, integrating the streaming service on its GigaTV set-top boxes for the first time. Unlike its competitor Sky, Vodafone has been more comfortable as an aggregator and telco than a producer of original content, preferring, with a wealth of content available, to focus on finding the right content instead. Indeed, with its distribution platform available to all broadcasters and content providers and long-term contracts players such as ARD, ZDF, RTL, and Netflix, Vodafone prefers to be the source of great content rather than the creator of it.


Sky saw a substantial decline in its subscriber base in 2021, with a 1.4% (-44,000) to 3.1 million subscribers. On the other hand, its revenue base rose by 5.9%, returning to its average growth following a COVID-19-affected period that caused sports cancellations throughout most of 2020.

The most significant factor in its recent subscriber decline was the loss of critical sports competitions and leagues to its competitor DAZN, including losing the rights to the entire Champions League in August 2020 and the Bundesliga Sunday games in June 2020. Growth from the top three OTT players in Germany also took a toll on the company in 2021, with the wide variety of premium content on these services drawing people to cut the cord and move towards the cheaper OTT services.

Sky has, however, implemented several strategies to retain and grow its company in recent years. One particularly active area is aggregation, with the company signing seven new partnership deals since 2020, including RTL, Disney+, DAZN, and Apple TV+. Moreover, it has also begun to implement several other partnerships with competitors such as Netflix for its pay-TV offers, DAZN linear channels to its channel service, and adding its Sky Ticket service on many of its pay-TV competitors' platforms.

The increased focus on its TV content was made particularly apparent following the setting up of Sky Studios in 2019, with the company also around the same time producing several highly-rated local shows such as "Das Boot" and "Der Pass." In 2021, Sky announced to double its content spend, reaching £1 billion a year by 2024, and produce over 60 German and international Sky Originals by the end of 2022. These include a range of new original series such as "Autobahn," "Tender Hearts," and "Chameleon."

In the OTT area, Sky's parent company, Comcast, launched a new OTT service, Peacock, available via Sky Q, Sky Ticket, and Sky's entertainment packages. Sky's investment in local content could not have come at a more critical time for the company, with the lack of local content seriously putting it at a disadvantage, particularly once its content distribution deal with HBO has expired. The company had initially been quite early in the game for content investment. Still, it seemed to fall behind for several reasons, including a lack of investment, too much focus on sports content, and not promoting its originals as effectively as its rivals. Despite this, Sky does not intend to match the same levels of investment as its rivals, with the company stating that it would not be possible to produce as much, even if it would like to. Its partnerships with other licensors will remain essential to stay competitive.

By Omdia