TBI Tech & Analysis: Exploring RTL’s strategy to compete with global giants

Sisi

Rob Moyser, Omdia’s senior analyst for TV & online video, explores how Europe’s RTL Group has redoubled its focus on its core brand, bringing content production, partnerships and M&A deals to the fore.

Over the past decade, RTL Group has become a significant force in the European OTT market, with two of its OTT services, RTL Now and Videoland, gaining strong footholds in both Germany and the Netherlands.

Since the launch of Disney+ in Europe, however, the OTT market has grown considerably, with a flurry of new global players entering the market, putting RTL’s local players at significant risk to customer churn.

To counteract this threat, RTL has implemented a new transformation strategy which aims to reshape and simplify its portfolio to respond to the considerable challenges it now faces. The first part of RTL’s strategy began in June 2021 with the company unveiling a new identity and design for its core brand RTL in Germany.

This was then followed by the launch of its new streaming service RTL+ in November, which, by the second half of 2022, will combine a whole host of media services from RTL’s parent company Bertelsmann, including ebooks from Penguin Random House, podcasts and audiobooks from AudioNow, and digital magazines and articles from Gruner + Jahr publishing group. Music on demand will, however, be supplied through a deal with French-owned music streamer.

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Forming new partnerships and alliances with other European media companies has also been a key part of RTL’s growth strategy.

In November 2020, the company signed its first major partnership deal with one of Germany’s top pay-TV operators Deutsche Telekom, integrating its streaming service to the company’s pay-TV offer, Magenta TV. A deal that particularly paid off for the company, with RTL gaining 319,000 customers in the last quarter of 2020, double the amount it had gained in the summer.

This was then followed by a deal with Sky Deutschland in June 2021, making its streaming service available to Sky Q’s customers in Germany and Austria.

Investment in original content is another key area of focus for RTL with plans to increase its content spend for RTL+ and Videoland from €85 million in 2019 to €600 million in 2026, up from its previous projection of €350 million for 2025. This investment however would not only go towards new commissions but to investments in technology and platform infrastructure as well.

For its German OTT service, RTL notably increased the number of originals in 2021, increasing it to around one new format per week – including more than 10 new German fiction series, including classic Sisi and comedy Herzogpark. This build-up of local productions will play a key role in competing against Netflix and Amazon Prime which have both already ploughed millions of dollars into their own German productions. RTL is not however aiming to match them in terms of subscribers but instead to build a loyal following and grow its service by 5-7 million by 2026.