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RTL is perhaps the most European of broadcasters. Formed in 2000 by the merger of Luxembourg's CLT-UFA and the British production house Pearson TV, today the group runs 60 TV channels and 31 radio stations stretching from Madrid to Zagreb.
Today the company is majority-owned by German media group Bertelsmann (better known for its publishing arm Penguin Random House, and its BMG music division), but it started off as Radio Luxembourg back in 1924, with broadcasts for European listeners in multiple languages. In 1997, the Compagnie Luxembourgeoise de Télédiffusion (CLT) merged with Bertelsmann's UFA to create CLT-UFA, which merged three years later with Pearson, to create RTL.
The RTL Group owns TV channels that are rated among the top two in eight European countries, and its production arm FreemantleMedia is one of the largest TV producers and distributors in the world. The company is increasingly targeting the digital arena as well, with online properties that deliver more than 22 billion video views every month. According to RTL, this is a higher monthly stream count than any other European media company.
Germany is the media group's largest market, and RTL has been active in the streaming video market there. Telco Transformation met up with Robert Dube, vice president for video on demand, RTL Interactive at Mediengruppe RTL Deutschland, to discuss TV Now, the broadcaster's catch-up service in Germany. (See RTL Keeps It Simple.)
Telco Transformation: Robert, can you describe your role at RTL?
Robert Dube: I am responsible for all catch-up and VoD services -- essentially all long-form VoD which has been on TV. I have responsibility across the board for VoD -- all product management, customer experience, customer lifecycle management etc.
Our service TV Now is offered via the Internet, on iOS and Android devices, on Fire TV etc., and we also offer it via managed platforms [pay-tv providers such as Deutsche Telekom, Vodafone Kabel Deutschland]. We are responsible for the services on the managed platforms as well, but we have a distribution team that handles negotiations with them.
TT: Is the service only in Germany?
RD: Mediengruppe RTL Deutschland is Germany's largest private broadcaster. Our service focus is primarily on Germany -- it is our largest market -- and also Austria and Switzerland. It's also a matter of content licensing -- we can only offer content where we have the rights, and we tend to prioritize getting content for Germany first, as it is the largest market.
[Interestingly, even though the mother company, RTL, is headquartered in Luxembourg, and German is widely spoken in the country, the TV Now service is not marketed there.]
TT: What led you to launch an online catch-up service?
RD: It was basically a transformation from linear TV to VoD. It was a new feature, a new proposition. It started in 2007 as a catch-up service for linear channels. Then in 2010 we launched an app for the main channel, called RTL Now. Then we added VOX Now, and so on. In Germany we had eight free-to-air channels, and we launched three different apps for the main channels. [The eighth channel is a "plus-one" or time-shifted channel, so there was no need to add another VoD service for it.]
But we found that was very complicated and confusing, so we aggregated all the VoD apps into one brand, one service -- which is TV Now. This was easier to promote, especially for placement and visibility in the OTT world. It also greatly benefits the smaller stations -- their content is more likely to get tried out in the aggregated app.
TT: How is it priced and packaged?
RD: The service is free on the Internet, but if you want to also get it on mobile devices then there is a monthly technical access fee of €2.99 ($3.14), because there is a development cost [to RTL] for that.
But this "TV Now Plus" tier also offers some additional content and fewer ads. It is also encoded at a higher level and allows users to access some content for more than seven days, which is the limit of the free catch-up service. In a sense, it is probably closest to Hulu in the US.
TT: How do you see the battle between pay-TV and OTT shaping up?
RD: Germany is a different market from the US or UK, for sure. There is high free-to-air coverage and pay-TV hasn't really picked up. But people are willing to pay for VoD online. It is becoming more relevant for the future.
However, we are not a pay-OTT service. We are the online service for a free-to-air channel, so we want the highest possible number of viewers. Our monetization is mainly through advertising, not pay.
And we are seeing that VoD is [creating] additional consumption, not cannibalizing consumption for linear channels. We have seen lots of statistics on this. I think perhaps channels with younger audiences can see more impact [from OTT]. But our channel has more older viewers. For sure there is a shift towards non-linear, but in our case it's slower.
So for us it's more about filling the gap -- when a customer wants to see a show, but can't see it at the time of broadcast, our VoD service fills that gap.
TT: What about new technologies? Are you looking at 4K/UHD, for example?
RD: For now, we don't even offer HD content -- we have just added the Fire TV [to our list of devices], before that our proposition was more mobile. We are looking to launch HD this year and also doing some trials with UHD, but it's a low priority.
Part of it is that our content is really TV content, not UHD content. Even with Netflix, HBO… it's not always "UHD" content. I mean Game of Thrones, that is good for UHD, but House of Cards, it is questionable that the impact is that great.
For us, UHD would be an add-on feature anyway [offered for an additional charge, not only ad-sponsored. That's why RTL calls it a tech access fee, because it's more difficult and costly to deliver from a technology perspective.]
TT: What are your priorities for the future?
RD: Technology and reach are our major focus. So, integrating our service into OTT platforms and also managed platforms. We will also look at adding more content and more quality as well, via UHD [for example.] We have added platforms, as with Amazon Fire TV stick, and think about [adding] more (Samsung SmartTVs, the Xbox etc.), and we have built relationships with managed platforms such as Deutsche Telekom AG (NYSE: DT) and Vodafone Kabel Deutschland.
TT: Are you thinking about targeting German-speaking expatriates who may be living away from home with this service?
RD: We are looking at options for expatriates, but it's not a major area for us right now. We did have a service that targeted German-speaking expatriates, but we ran it for a year and then closed it. If we look into expanding our TV Now product [we may review that.]
— Aditya Kishore, Practice Leader, Video Transformation, Telco Transformation
