Broadcasters must move to ‘more sophisticated’ business models, says RTL chief

Guillaume de Posch

Free-to-air broadcasters need to “move away a bit from this advertising-funded business model into more sophisticated business model”, according to RTL Group co-CEO Guillaume de Posch.

Speaking at Cable Congress in Brussels, de Posch said that the TV business is becoming more complex due to more TV channels, new online distributers like Netflix and Amazon and more devices.

“We used to have broad, general entertainment channels – we need now to go nicher and nicher,” said de Posch, claiming that going niche, moving from linear to-non linear and developing new business models are three “major shifts” occurring in the TV industry.

One part of RTL’s strategy that he identified was the development and investment in non-linear channels to adjust to the continuing evolution of viewing habits.

De Posch said that internally, RTL had planned for around 15-20% of content consumption in three to five years to be non-linear. “Is this a disruption for us? Yes, in a way. Could it be 70%? Yes, that would be disruption and we need to hedge and get prepared for that,” said de Posch.

“I would say our strongest response to non-linear television in the last two years or three years has been to heavily invest into multi-channel networks,” he added, claiming that investing in the US was a tactical move that enables RTL able to distribute web content worldwide, including back in Europe.

Last November, RTL Group agreed to pay US$107 million (€85 million) to buy a controlling stake in StyleHaul – a multi-channel Youtube network dedicated to fashion, beauty and lifestyle. A year earlier, in June 2013, it invested €27 million in BroadbandTV, another leading MCN.

RTL’s other investments in the digital space include its July 2014 investment in in US video advertising platform SpotXchange. RTL paid €107 million to take a 65% majority stake in the firm, claiming the deal established it as the first major broadcaster to invest in the rapidly growing market of programmatic online video advertising.

De Posch said that TV firms need to look at how they can make an additional business out of targeted advertising, and how to better harness available data about customers’ profile and viewing habits.