The international media industry is in the middle of a fundamental transformation, with huge opportunities for those prepared to shape the future.
RTL Group transforms its business for higher reach and better monetisation to unlock these opportunities. Combining linear TV channels and non-linear services increases total reach and requires investments in content, marketing and state-of-the-art streaming services. Targeting, personalisation and recommendation improve the monetisation of that reach and require investments in advertising technology and data.
RTL Group’s Board of Directors and Executive Committee
have defined a strategy that builds upon three priorities:
1 Strengthening the Group’s core businesses.
2 Expanding RTL Group’s growth businesses, in particular
in the areas of streaming, content production and
technology.
3 Fostering alliances and partnerships in the European
media industry.
Wherever attractive opportunities arise, the Group aims to
consolidate across its existing European broadcasting
footprint – including mergers and acquisitions. The
strategic rationale is about scale, pooling resources and
creativity to compete with global tech platforms in the
respective national markets. Instead of consolidating in
larger steps, as initially planned, RTL Group executes a
series of smaller steps as an alternative path to scale.
This includes, for example, strengthening the Group’s
national and international ad sales businesses, fostering
distribution partnerships, investments in streaming
technology and data, or smaller consolidation steps. In
Belgium, Croatia and most recently in the Netherlands,
RTL Group decided to sell its TV and streaming businesses
to regional media companies so that they can act as
consolidators in these markets.
Building and extending families of TV channels addresses
increasing audience fragmentation and competition in a
digital, multi-channel world, with the overall goal of
maintaining or growing RTL Group’s audience shares and
net TV advertising market shares in the various countries.
Over the past years, RTL Group’s families of channels
have been extended by digital channels, including Nitro,
RTL Up, Vox Up, and 6ter.
To further strengthen its broadcasting business, RTL Group aims to increase non-advertising revenue. This includes growing revenue from platform operators – cable
network operators, satellite companies and internet TV providers – for services such as high-definition TV channels, streaming platforms and digital pay channels (distribution revenue) as well as intensifying distribution and pay streaming partnerships.
RTL Group’s management continuously reviews the
Group’s portfolio. In the past years, RTL Group sold
several non-core assets in Europe, including the
football club Girondins de Bordeaux and the website
MonAlbumPhoto in France, the home entertainment and
theatrical distribution company Universum Film in
Germany, the Vancouver-based digital video network
BroadbandTV (BBTV), the US ad-tech company SpotX,
the US-based mobile entertainment company Ludia and
the US software and data company for media
measurement, VideoAmp.
These disposals are consistent with RTL Group’s strategy
to focus on growing its European digital businesses in the
areas of streaming and advertising technology, alongside
the Group’s global content business, Fremantle.
RTL Group is building national streaming champions in the
European countries where it has leading families of TV
channels. These streaming services capitalise on the
Group’s competitive advantage in local programming to
complement global services such as Netflix, Amazon
Prime and Disney+.
RTL Group operates the services RTL+ in Germany and
Hungary and 6play in France that have gradually
introduced a hybrid business model consisting of various
price packages. Lower-priced or free packages are
predominantly or fully financed by advertising. Various
premium price packages include, for example, parallel
streams on various devices, the live signal of RTL TV
channels in HD quality and premium content bundles.
These content bundles offer programmes from the Group’s
linear TV channels in the respective countries, plus
premium content either exclusively produced or licensed
from third parties.
Following the envisaged disposal of the Dutch streaming
service Videoland and the investments in M6+ in France,
RTL Group has updated the targets for its streaming
services RTL+ in Germany, RTL+ in Hungary and M6+
(previous 6play) in France: by 2026, the Group aims to
reach around 9 million paying subscribers and around
€750 million of streaming revenue. RTL Group plans to
increase its content spend to around €500 million and to
become profitable by 2026. At the end of December
2023, RTL Group registered 5.569 million paying
subscribers for its streaming services RTL+ in Germany
and Hungary and 6play in France, up 30.5 per cent year
on year (end of December 2022: 4.267 million).
In Germany, the Group rebranded its rapidly growing
streaming service as RTL+ in November 2021 and
launched the RTL+ multimedia app at the beginning of
August 2023. RTL+ is the first German all-in-one
streaming bundle that combines video, music, audiobooks,
podcasts and magazine content in one subscription and
one app, which is a unique selling proposition in the
German-speaking market.
In France, Groupe M6’s streaming service 6play is the
ad-funded streaming service, with 21.3 million active
users. In October 2022, Groupe M6 launched 6play Max,
a paid subscription video-on-demand version of 6play,
developed by RTL Group’s streaming technology company
Bedrock. Within this subscription offer, users can watch
content without advertising, in full HD and including
download features. In March 2024, Groupe M6 presented
its investment plan for its streaming service M6+ (previous
6play). The additional investments of €100 million in
content, technology and marketing will build up over time.
The service will be primarily financed by advertising
(AVOD), complemented by a premium subscription
tier (SVOD). It will feature exclusive local content
accessible from all screens alongside offering innovative
experiences for the viewers and a higher value proposition
for advertisers.
In Hungary, RTL Hungary launched its streaming service
RTL+ in November 2022. The new service offers exclusive
local content, which is a unique feature in the Hungarian
streaming landscape, and is also based on the technology
of Bedrock.
RTL Group’s content business, Fremantle, is one of the
world’s largest creators, producers and distributors of
scripted and unscripted content. Fremantle runs an
international network of teams across production and
distribution in 27 countries. The company is responsible
for more than 11,000 hours of programming per year, and
distributes content worldwide.
Fremantle aims to achieve full-year revenue of €3 billion
by 2025/2026. To reach this goal, RTL Group is investing
in Fremantle across entertainment, drama and film, and documentaries – both organically and via acquisitions.
After integrating its acquired labels/production companies
into the Fremantle network and reducing overhead,
Fremantle’s Adjusted EBITA margin is expected to increase
to 9 per cent by 2026.
Fremantle pursues three strategic goals:
Fremantle continues to invest in high-end productions
to accelerate its growth in drama series, films and documentaries. Acquisitions include, for example,
Miso Film in Scandinavia, This is Nice Group in the
Nordics, Wildside and Lux Vide in Italy, Asacha Media
Group and Kwaï in France, A Team Productions in
Belgium, Abot Hameiri and Silvio Productions in Israel,
Dancing Ledge Productions, 72 Films, Wildstar Films and
Boldprint Studios in the UK, Passenger and Fabel in the
US, Eureka in the US and Australia, Element Pictures in
Ireland and Beach House Pictures in Asia.
Fremantle also bought minority stakes in a number of
new production companies to secure first access to their
creative talent and output. Working with world-class
storytellers is key to Fremantle’s scripted strategy.
As a result of this strategy, Fremantle generated
31 per cent of its total revenue in 2023 from drama
and film productions.
To replicate this success in documentaries, Fremantle has
established a new global documentaries division, acquired
documentary production companies, and set up its own
premium documentary label Undeniable, which focuses on
producing world-class premium feature documentaries.
Combining the strengths of RTL Group’s core business –
high reach, brand safety and emotional storytelling – with
data and targeting offers significant growth potential for
the Group’s largest revenue stream: advertising.
Addressable TV will grow the available inventory, attract
new advertisers and can be sold with a premium
compared to traditional linear TV advertising.
RTL Group’s largest unit, RTL Deutschland, is responsible
for the Group’s ad-tech business, Smartclip. Based on the
Smartclip technology, RTL aims to create an open ad-tech
platform tailored to the needs of European broadcasters
and streaming services. Accordingly, RTL Deutschland will
invest further in evolving and growing the Smartclip
platform. This includes acquisitions such as French
ad-tech company Realytics, which complemented the
existing ad-tech stack. Realytics systematically analyses
the impact of TV advertising on advertiser websites and
ensures data availability for digital ad decision-making.
With its European ad-tech businesses, RTL Group made
significant progress in building an open European ad-tech
platform and in tapping into the high-growth market of
addressable TV (ATV) advertising. In 2021, it was
predicted that in Germany alone, the market for ATV
advertising was expected to grow to more than
€500 million by 2025. Based on this prediction,
RTL Deutschland was expected to generate approximately
€200 million in ATV advertising revenue by 2025.
However, the macroeconomic environment in the past
three years, the slower technical distribution of connected
smart TV devices and set top boxes, and the acceptance
of ATV advertising by clients delayed market growth.
RTL Group expects that RTL Deutschland will generate
approximately €200 million in ATV advertising revenue by
2027, two years later than previously planned.
Bedrock, a French technology company co-founded
by RTL Group and Groupe M6, builds the tech platform
for Groupe M6’s streaming service 6play, Videoland in
the Netherlands and RTL+ in Hungary. This common
platform allows RTL Group to bundle streaming
technology investments.
In competing with the global tech platforms, new alliances
and partnerships between European media companies
become increasingly important.
In autumn 2019, RTL Group’s management started to
promote new partnership opportunities – all based on the
philosophy of bundling European broadcasters’ resources
to establish open and neutral platforms. RTL Group offers
these partnership opportunities in areas such as
advertising sales, advertising technology, streaming
technology, content creation and data.
As part of the envisaged sale of RTL Nederland,
RTL Group and DPG Media will enter into a strategic
partnership, spanning from technology to advertising sales
and content. At the time of closing the transaction, the
service agreements for RTL Nederland in the areas of
streaming technology (via Bedrock), broadcasting
operations (via RTL Group’s technical services provider
BCE) and international advertising sales (via RTL
AdAlliance) will be renewed for at least three years.
RTL Nederland will also continue to use the solutions
provided by RTL Group’s ad-tech business, Smartclip.
In November 2020, RTL Deutschland and Deutsche Telekom announced a strategic partnership to integrate
the streaming subscription RTL+ Premium within Deutsche
Telekom’s TV offer, Magenta TV. Since then, price plans
for both Magenta TV Smart and Magenta TV Smart Flex
have included RTL+ Premium with no additional fee for
customers. In addition, RTL Deutschland sub-licensed the
exclusive rights to 12 Uefa Euro 2024 matches from
Deutsche Telekom.
In December 2023, Sky Deutschland and RTL Deutschland announced a strategic two-year content partnership to offer German viewers access to even more live sport. The innovative partnership, which is unique in the German TV market so far, has the goal of delivering greater value to both Sky and RTL viewers by exchanging content. This includes sub-licensing seven Formula 1 races, one game from the English Premier League per match week on RTL+, alongside three conference broadcasts of the 2nd Bundesliga for RTL Deutschland and Uefa Europa League or Uefa Europa Conference League matches for Sky Deutschland. The partnership additionally includes selected highlights rights, Sky fiction blockbusters and close collaboration in production and on-screen editorial between the two broadcasters.
One key development for RTL Group’s largest revenue
stream – advertising – has been the increased demand
from advertisers and agencies for global ad-buying
opportunities. Consequently, RTL Group is expanding
international advertising sales to cater to the demand
from international advertisers and agencies for easy
access to the Group’s large portfolio of TV and streaming
services, digital video company and advertising
technology in a brand-safe environment.
In 2022, RTL Group combined RTL AdConnect, G+J iMS and the media division of Smartclip to create an international advertising sales champion: RTL AdAlliance. RTL AdAlliance provides international advertisers with simplified access to a unique portfolio of media brands across TV, digital video, radio/audio, online, mobile and print.
On the national level, the German Ad Alliance launched in 2016, offering high reach to advertisers and agencies. The German Ad Alliance is a one-stop shop for the development of cross-media solutions and innovative advertising products. Its portfolio spans television, radio/ audio, print, and digital. Ad Alliance is the only sales house in Germany that offers complex, all-media campaigns from a single source. In 2019, the sales house Media Impact (Axel Springer) became a partner of the German Ad Alliance, and from January 2024, Ad Alliance has taken over the advertising sales of the digital portfolio of Bauer Advance. The partnership includes all digital brands of the Bauer Media Group and is a further step towards RTL Group’s envisaged ad sales consolidation. Together, the platforms of Ad Alliance reach 99 per cent of the German population. Ad Alliance remains open to additional partnerships.
