In Germany, digital ad spending is up, and TV ad spending is down. Differences in media consumption habits make the market ripe for AVOD and FAST services, with streaming services like Apple TV+ and Netflix struggling to grow their percentage share of the market. Read on to learn why localizing content for German ad-supported streaming channels is the best way to break into the market with the largest population in Western Europe. 

IAB Europe’s AdEX Benchmark report recently revealed Germany was “the fastest growing western European country” for digital advertising, with 10.4% growth. Business Insider predicted digital ad buyer spending in Germany of €9.49 billion ($10.82 billion) in 2021 – a 20% year-over-year increase. With TV advertising experiencing slow or no growth, we can infer this upsurge is a result of the rapid growth of streaming services. Yet, in Germany, on-demand streaming services haven’t seen much success. Kantar’s Entertainment on Demand study revealed household penetration growth of just +0.9% points for the German subscription video on demand (SVoD) market over the last 12 months. The average SVoD enabled household held 2.8 subscriptions, the same as a year ago (consumers in the US hold an average of 4.8). Why is advertising spending up if Germans aren’t biting for streaming services? The answer lies in the unique suitability of ad-supported models for the German market.

VAUNET Advertising Market Forecast 2022. We can see TV advertising dropping between 2019 and 2020 and slowing in growth thereafter. In-Stream Video Advertising, in contrast, has steadily increased. 

 Germany is currently experiencing a boom in AVOD interest. Around three in four consumers in Germany use free ad-supported video streaming services, and 66% of 35 to 44-year-olds are willing to consume ad-financed video-on-demand content. German consumption habits make ad-supported content a good fit: 65% of German SVoD subscribers use video streaming to “switch off” compared to 56% of those from Great Britain. Ad-supported content is suited to passive or background viewing, with platforms tending to privilege older, syndicated shows or classic movies, in contrast to prestige dramas or original content pushed by SVoD services like Disney and Apple TV+. Also, compared to British viewers, 9% fewer German subscribers tended to binge-watch series: suggesting a closer alignment between German viewing habits and linear FAST channels. 

Platforms are responding to these market preferences: Discovery+, Paramount+, and Peacock have committed to a German rollout in 2022. Philipp Rotermund, CEO of AVOD service Watch4, announced the company would launch a Watch4 Movies FAST channel in Germany. The channel, "designed to be a more traditional linear TV watching experience for FAST platforms’ audiences,” is Rotermund’s play “to be where ever” there are viewers in a “fractured TV market”.  With the proliferation of new services and channel launches, advertisers are seizing the opportunity to get their products and services airtime and viewership.

This trend is great news for content distributors: or content owners looking to become distributors with little effort.  AVOD and FAST have a lower entry barrier compared to subscription streaming services. Ad-supported platforms cater to more niche content and specific viewer interests. As revenue comes from ad impressions, there’s less risk involved, and setting up a channel is pretty straightforward. Combined with the trend toward advertising in Germany, it’s the perfect way to break into the market and increase viewers and revenue. It’s best to move now, with these services just launching: as Kantar’s report highlights, “with limited prevalence in the German market at present […] services will be looking to spark immediate growth through getting strong content to consumers at a low price point”.

Before distributing your content on an AVOD platform or FAST channel, you need to localize your content for the German market. As audience satisfaction and engagement are core to their revenue model, many FAST and AVOD platforms now require fully localized content. This prerequisite means you generally need your content dubbed rather than just subtitled. 

There are various ways to localize content, and your method will depend on the material and your aims. For news, documentaries, or nature content, the most cost- and results-effective method uses human-in-the-loop machine translation. Automatic dubbing can produce localized content in hours via AI and machine learning. Human experts then quality check the machine translation for sense and cultural norms, resulting in high-quality localization ready for use in-market. Here's an example of the type of content Papercup is dubbing for media owners to make their moves into the German AVOD market:

The low barrier to entry for both content localization and ad-supported content distribution, combined with consumer trends in Germany, makes it a fantastic time to launch in this market on these services. At the same time, it means content owners in this market will move quickly. Speak to Papercup's experts today to learn how video localization could get your content in front of viewers in a matter of weeks or to talk through your content and distribution goals.