CHANGING CHANNELS RTL Goes International

RTL Group, Europe’s most profitable broadcaster, is about to launch a global German-language pay-TV service, Handelsblatt has learned. But can it compete in a rapidly changing media landscape?
Anchor Peter Kloeppel reads the news on the flagship RTL TV channel.

The German broadcaster RTL is to launch a new international German-language pay-TV channel later this month, Handelsblatt has learned. After more than ten years in the pipeline, the new channel, RTL International, will go live on January 18, becoming the newest channel in the RTL Group, Europe’s largest private broadcast corporation.

“There are up to 10 million Germans living abroad,” Stefan Sporn, who heads international distribution at RTL Germany, told Handelsblatt: “They don’t usually have access to a linear German TV channel,” he added.

Andre Prahl, RTL’s head of program distribution, said: “We want audiences to access our content through all the major foreign platforms. RTL International means our programming will be available in many foreign countries for the first time.”

There are 10 million Germans living abroad without access to a linear German TV channel. Stefan Sporn, Head of International Distribution, RTL

The new channel will take its programming from several of RTL Group’s existing stations, above all from its flagship channel, RTL Television, Germany’s largest private free-to-air broadcaster. As well as well-known news broadcasts, the new channel will feature regional shows and leading German soap operas.

Appropriately enough, it will also carry “Goodbye Deutschland,” a popular documentary about Germans moving overseas, produced by VOX, another RTL station.

RTL International will initially roll out in Canada, southern Africa, Australia, Israel and Georgia, followed by launches in Brazil and in the United States. In the States, it will transmit via a subsidiary of the American cable company Liberty Global. “We’re focusing on regions where many Germans live and we can ensure service,” Mr. Sporn said.

Since the channel will not produce its own programming, costs will be relatively low. Sources at RTL put the initial capital investment at less than €10 million (about $10.6 million), allowing it to rapidly reach a break-even point. Mr. Sporn, the 45-year old lawyer who heads up RTL’s international distribution, said the company was confident of becoming profitable within 3 years.

If so, the new channel will become yet another profit source for the remarkably successful RTL Group, which is majority owned by the media group Bertelsmann, a privately-owned firm. RTL has proven adept in navigating the rapidly changing media landscape, including complex new demands in advertising.

In the last nine months, the group’s earnings before taxes, interest and amortization (known as EBITA) rose 6 percent to €716 million, giving it an impressive EBITA margin of 17 percent. Its German subsidiary saw overall turnover up 7 percent. No wonder the company is currently putting the finishing touches to a lavish new headquarters in Luxembourg.

RTL International, the new overseas channel, will be available both online and by satellite, as well as on cable. “European distribution won’t be a major focus, since RTL can be watched via satellite in much of Europe,” he added. The phenomenon of “satellite spillover,” where signals are picked up in neighboring regions, means German broadcasts can be seen in large parts of Eastern Europe and the Iberian peninsula. RTL’s flagship channel also is available in many European cable packages, giving it a strong position in the Balkans and in the Benelux countries.

The idea of a German-language overseas pay-TV service is not entirely new. In 2004, the Munich-based television company Pro Sieben Sat 1 launched its international subsidiary “Pro Sieben Sat 1 Welt.” But the venture did not live up to expectations and is now only available in North America.

However, RTL thinks the time is right for a new channel. “Cable companies are increasingly finding that foreign-language channels make an attractive addition to their offering. They have more bandwidth for new channels these days. That helps us in talks,” said Mr. Sporn.

The RTL Group has plenty of experience with global programming: for many years, Antena 3, its Spanish subsidiary, has broadcast to audiences in North and South America.

RTL International will also partly be in competition with Deutsche Welle, the state-funded German broadcaster which offers global television and radio transmissions, as well as online content, in some thirty languages. Traditionally seen as rather staid, the broadcaster has seen something of a resurgence in recent years, drawing new audiences and praise for its coverage of the various crises of 2015.

 

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Hans-Peter Siebenhaar is Handelsblatt's correspondent in Vienna and specializes in media and telecommunications coverage. To contact the author: [email protected]