Annual Report 2016

EXCLUSIVE CONTENT –

THE POWER ENGINE IN THE TOTAL VIDEO UNIVERSE

Guillaume
de Posch
Anke
Schäferkordt

Following a series of investments into online video and digital advertising, digital has become a rapidly growing third pillar of RTL Group’s business. We talked to Anke Schäferkordt and Guillaume de Posch about RTL Group’s financial performance in 2016, its growth strategy, the importance of editorial independence, and how RTL Group is shaping the ‘total video’ environment globally.

How did RTL Group perform in 2016?

Guillaume de Posch: 2016 was another record year for RTL Group. We registered high revenue growth, resulting in consolidated revenue of € 6,237 million. Operating profit also reached a new all-time high, thanks to a higher EBITA contribution from Germany and a positive one-off effect at Groupe M6. In France, this positive one-off effect at Groupe M6 – amounting to € 42 million – was due to the settlement of the M6 Mobile contract, which more than compensated for the impact of higher programming costs for the Uefa Euro 2016 live broadcasts. Meanwhile, both Groupe M6 and Mediengruppe RTL Deutschland saw a year-end rally in TV advertising in December.

Anke Schäferkordt: Mediengruppe RTL Deutschland generated another record profit, for the fifth year in a row. Despite strong competition from the public channels broadcasting the Uefa Euro 2016 and the Olympic Games, Mediengruppe RTL Deutschland’s channels recorded a stable combined audience share in the target group. RTL Plus, launched on 4 June 2016, was our most popular channel launch of the past few years.

What does this mean for your shareholders?

Anke Schäferkordt: We are a very cash-generative business, which allows us to make attractive dividend payments to our shareholders. The ordinary dividend for the financial year 2016 is € 3.00 per share. Combined with the interim dividend of € 1.00 paid in September 2016, this brings the total dividend for 2016 to € 4.00 per share. Based on the average share price at the Frankfurt Stock Exchange for the full year 2016, this represents a dividend yield of 5.4 per cent – once again, among the best in class in Europe. Having said that, we still have the financial means for further investments, fuelling our growth strategy.

But you just decided not to exercise the call option for BroadbandTV. How does that fit in?

Guillaume de Posch: First of all, let’s not forget that RTL Group owns 51 per cent of BroadbandTV and is the controlling shareholder. This is still the case for now, while we review our strategic options together with the BroadbandTV minority shareholders. This doesn’t change our digital strategy. BroadbandTV was our ground-breaking, significant investment in online video back in 2013 and we are very proud of what the BBTV management and teams have achieved in the past three and a half years. Since then, the company has been a driving force for our digital ambitions – especially if you look at the number of online video views RTL Group generates among the millennials. Now, we have reached a point where we need to decide how to best develop this rapidly growing asset. That’s why we’ve decided – together with the BroadbandTV minority shareholders – to evaluate all strategic options for BroadbandTV. We aim to finish this evaluation process during 2017.

“Ultimately it is not only
about video views,
but about the ability
to monetise them”

Guillaume de Posch

In March 2015 you announced you wanted to generate 10 per cent of RTL Group’s total revenue from digital within three to five years. How is this progressing?

Anke Schäferkordt: If you look at the competition, you’ll notice that some of the other players in the market come up with digital revenue shares that are a little higher than ours, but if you take a closer look, you’ll see that our definitions differ fundamentally. RTL Group’s digital revenue includes only pure digital revenue: no home shopping, no e-commerce and no platform revenue for digital TV. If you apply this definition to all players, we’re in a reasonably comfortable position. Our digital revenue grew by 32 per cent in 2016. With currently € 670 million in revenue, digital is truly a dynamic third pillar for RTL Group and makes up 10.7 per cent of our total revenue. We have reached this goal much faster than originally expected. We will aim for further growth in digital, with the target of generating at least 15 per cent of our total revenue from digital within the next three to five years.

“TV stands for total video”
Anke Schäferkordt
and Guillaume de Posch
spoke about the
rapidly changing TV business
at the Bertelsmann
Management Meeting 2016

How do you plan to achieve that?

Guillaume de Posch: Looking at online video views – RTL Group generated 274 billion online video views in 2016 – we are already one of the leading online video companies globally, in particular in the YouTube ecosphere. But it is important to understand that ultimately it is not only about video views, but about the ability to monetise them. There is still a big gap in value between a view on our broadcasters’ catch-up TV services such as 6play or TV Now, which feature premium long-form content, and a view on YouTube which is more short form. Having achieved significant global reach in online video, we will now focus more and more on monetising this reach. This is also why we invested in SpotX. We aim to become one of the leading partners for the advertising industry, offering an inventory that covers all the different programming segments from short-form video to premium long-form content.

Anke Schäferkordt: Mediengruppe RTL Deutschland acquired Smartclip in 2016. The company fits in with this strategy in two distinct ways. Firstly, it has substantially boosted our video inventory, because Smartclip currently aggregates the output of 750 publishers, most of whom produce short-form content. Secondly, there’s the technological factor: Smartclip is a strong player in connected TV, which is an up-and-coming area, and we are very happy with Smartclip’s development in 2016. The company scored a solid double-digit million revenue figure and, even more importantly, operates profitably. In January 2017, we made another investment and acquired 30 per cent of Q Division, an expert in data handling.

In April 2016,
Guillaume de Posch held
a keynote speech at Mip TV
in Cannes explaining
why TV nowadays is more than
just a device in the living room

Why is data a real topic for a TV company?

Anke Schäferkordt: In the age of digitisation, the role of ‘big data’ – in the form of cookies, clusters or cross-device analytics – is becoming ever-more prominent. Indeed, the aggregation and exploitation of data is increasingly important for media companies such as RTL Group, their advertising clients and ultimately the consumer. Accordingly, in July 2016, Mediengruppe RTL Deutschland created a new role of ‘Head of Smart Data’, who reports directly to the Chief Strategy Officer.

What is RTL Group’s response to the rapidly growing non-linear viewing of long-form content – mostly via streaming services, which often operate on an international level?

Anke Schäferkordt: Today, we clearly recognise that pay platforms such as Netflix or Amazon Prime are gaining in popularity. There is a simple reason for this: these services offer attractive price points for their pay offers, in particular in countries with high pay-TV penetration. Consumers in the US pay around $ 100 per month for their cable bundle, while Netflix charges – for an advertising-free service – $ 9.99 for its standard offer. This is fundamentally different in most European countries. But of course, we have intensively analysed our opportunities in the field of SVOD, subscription video-on-demand. For our broadcasters across Europe, we see interesting business opportunities for hybrid models, consisting of a free, advertising-funded service and a paid, premium content bundle – offering the programmes of our linear TV channels plus licensed content from third parties. Regardless of how we will further develop the business models of our non-linear services, one thing is more than certain: content, or more specifically, exclusive content, is the power engine for all our offers in the ‘total video universe’.

“RTL Plus, launched on
4 June 2016, was
our most popular
channel launch
of the past few years”

Guillaume de Posch


Guillaume de Posch: Streaming platforms also represent an opportunity for FremantleMedia. Take, for example, American Gods, the ambitious fantasy series based on the popular novel by Neil Gaiman. The series was largely financed in the US by our client, Starz. Outside the US, the series found a worldwide client, Amazon Prime Video, to which we sold the rights to more than 200 territories. Deutschland 86, the sequel to Deutschland 83, will also be produced in collaboration with Amazon. To be prepared for this opportunity, FremantleMedia made some targeted acquisitions, fuelling the creative pipeline – and it is starting to pay off. The Young Pope, for example, starring Jude Law and directed by Paolo Sorrentino, is produced by FremantleMedia’s newly acquired company Wildside. And we see yet another trend: if you look at the market, you can see that more and more stars are changing from working for cinema blockbuster productions only to working on television series – both on and off camera. Coming back to The Young Pope: it’s unlikely that Jude Law or Paolo Sorrentino would have worked for TV 15 years ago.

In June, you presented a new mission statement.
Can you tell us something about that?

Guillaume de Posch: The old mission statement gave a really accurate description of RTL Group’s key mission of ten or 15 years ago. Back then, we had a clear focus on geographic expansion in the broadcast business. But a lot has changed in a decade, especially in our industry. Five years ago, we were not invested in any multi-channel network nor in advertising technology. Today, digital makes up more than 10 per cent of our revenue! In effect, we’re transforming a European entertainment network into a global leader in video production, aggregation and monetisation. That’s the only way we’re going to write the next chapter in RTL Group’s success story – and the new mission statement is all about capturing our ambition.

“Digitisation has changed
the industry”
Anke Schäferkordt at
TreffPunkt IHK Bielefeld in
November 2016

“‘Always close to the audience’ –
this is and will remain one of
our key missions at RTL Group”

Anke Schäferkordt

The words ‘independence’ and ‘diversity’ really stand out in the new mission statement. How important is editorial independence at RTL Group?

Anke Schäferkordt: Editorial and journalistic independence are deeply rooted in all of our news organisations. Senior management doesn’t interfere with the independence of our editorial personnel. This is especially crucial in times of ‘fake news’ and ‘filter bubbles’. Yes, there has always been fake news, across all media genres. With this, I mean news stories which simply weren’t true. However, one aspect of the public debate has changed significantly. Today, some people attack the media as being fake news themselves, resenting established news brands as part of an elitist, out-of-touch establishment – and this is a concern in many countries. I don’t believe that we will get anywhere by demanding that Facebook checks every single post or that governments decide what’s right or wrong. In times like these, it’s our responsibility as media companies not only to remain independent, but also to report factually and truthfully and to ultimately keep and regain the audience’s trust. Let me be very clear: we are not in the business of lecturing our viewers and listeners. We have to take their concerns very seriously. ‘Always close to the audience’ is, and will remain, one of our key missions at RTL Group.

Facebook is one of the dominant players in the digital advertising market. How do you prepare for the competition from the US tech giants?

Guillaume de Posch: First of all, we’re not afraid of competition, but we want the same rules for everyone. Our ‘total video’ industry is highly attractive, with many US giants placing big bets on expansion into video. Many of these players are using their state-of-the-art technology and massive consumer data to develop sophisticated advertising offers – currently for online services, but probably also for linear TV in the near future. To succeed in an ever more competitive world, there’s the need for a level playing field. The proposed revisions to European legislation by the European Commission are a step in the right direction, helping to adapt the legal framework to recent changes. A few more steps are desirable, as this might be the last opportunity for a long time to create the right framework to nurture, develop and grow the media groups ‘made in Europe’.

Anke Schäferkordt: In parallel, we are preparing ourselves by investing in advertising technology and exploring new partnerships. In 2016, we announced Ad Alliance, a new advertising offer in Germany in collaboration with Gruner + Jahr, which started in January 2017. There’s a high demand from advertising clients to showcase their brands in cross-media campaigns. But they’re also very interested in automation. For this reason, both advertising sales houses are likewise interested in technology in general, and programmatic advertising sales in particular. When developing technologies, it makes a great deal of sense to work together across RTL Group and with external partners, since scale yields are distinct competitive advantages in this connection.

Is this trend also a driving force for the planned combination of Groupe M6 and RTL Group’s French radio family?

Guillaume de Posch: We are an active player in shaping the media landscape. This combination, if realised, aims to open a new, promising chapter for RTL Radio and Groupe M6 in France as convergence and consolidation continue to shape our industry – not only in North America, but also across our European footprint. We are re-organising our French TV and radio activities into one integrated media house. This path is followed by other media groups in France and has already been successfully achieved in Benelux within our Group.

Does this mean that in the future, you will cover everything from content production to programmatic advertising and addressable TV?

Guillaume de Posch: That is exactly what our ‘total video’ approach is about. We want to focus our strategy on video as our current core business. This is what we do best, and we want to do it right. Professionally produced video is at the heart of our strategy and our objective is to cover all key links in the value chain, including its technological elements, and gaining expertise in them so we can offer them to viewers of all ages.

“TO SUCCEED IN AN
EVER-MORE COMPETITIVE WORLD,
THERE’S THE NEED FOR
A LEVEL PLAYING FIELD
in terms of regulation”

Guillaume de Posch

In June 2016, Anke Schäferkordt
and Guillaume de Posch
discussed the Group’s opportunities
and challenges in the
rapidly changing total video industry
at the RTL Group
finance meeting in Belgium

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RTL Group
revenue split

48.0 %
TV
Advertising
4.1 %
Radio
Advertising
4.5 %
Platform
Revenue
21.2 %
Content
10.7 %
Digital
11.5 %
Other
48.0 %
TV advertising
4.1 %
Radio advertising
4.5 %
Platform
21.2 %
Content
10.7 %
Digital
11.5 %
Other
Share price performance
01/01/2016 – 31/12/2016
+6.8%
MDAX
-8.0%
EURO STOXX
600 MEDIA
-9.5%
RTL Group
-21.7%
ProSiebenSat1
Revenue
(€ million)
* Restated for IFRS 11
EBITA
(€ million)
** Restated for changes in purchase price allocation
** Restated for IFRS 11
Net profit attributable to
RTL Group shareholders
(€ million)
* Restated for changes in purchase price allocation
Equity
(€ million)
* Restated for changes in purchase price allocation
Market Capitalisation*
(€ billion)
* As of 31 December
Total Dividend/Dividend Yield
per Share
(%)
(€)
**** Including an interim dividend of € 1.00 per share, paid in September 2016
**** Including an extraordinary interim dividend of € 1.00 per share, paid in September 2015
**** Including an extraordinary interim dividend of € 2.00 per share, paid in September 2014
**** Including an extraordinary interim dividend of € 2.50 per share, paid in September 2013
Cash Conversion Rate*
(%)
* Calculated as operating pre-tax cash flow as a percentage of EBITA
Platform Revenue*
(€ million)
** Revenue generated across all distribution platforms (cable, satellite, IPTV)
** including subscription and re-transmission fees
** Restated
Digital Revenue*
(€ million)
* Excluding e-commerce, home shopping and platform revenue for digital TV
Online Video Views
(billion)
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The Power of Total Video

Stories. Drama. Emotions.

THE VALUE
OF STORYTELLING
In the world of entertainment, content remains king. When it comes to content production and distribution, RTL Group’s strategy is to broaden its portfolio and build a vast content library of prime-time drama series, as well as selling the rights to these shows to TV channels and online video platforms worldwide. For RTL Group’s broadcasters, it’s vital to define their brand through local in house productions. This helps to stand out in the marketplace where TV channels and streaming services compete, and to become more independent from US blockbusters and series.

Today, viewers around the world have the biggest choice of short and long-form videos ever – no matter what size their screen. Since consumers began to invest in state-of-the-art television and sound systems – effectively turning their living rooms into home cinemas – the demand for high-quality video content has grown rapidly.

Consumers have developed an insatiable appetite for binge watching quality drama series, rather than waiting a week for the next episode of the shows they love. And with many of the best entertainment writers, producers and actors now working for TV series rather than Hollywood blockbusters – who can blame them? The good news: viewing times are at an all-time high, with usage on linear television remaining high.

Acknowledging these shifts, RTL Group has been investing in the high-quality content and compelling storytelling viewers can’t get enough of. 2016 was no exception, with investment in various fields, ranging from smaller domestic drama productions for local TV channels to prime-time drama series with a star-studded Hollywood line-up – all of which can be sold worldwide. At RTL Group, we continue to offer audiences what they want, when they want, where they want.

RTL GROUP HAS BEEN INVESTING IN THE HIGH-QUALITY CONTENT AND COMPELLING STORYTELLING VIEWERS CAN’T GET ENOUGH OF.

The Spy
Returns

In October 2016, UFA Fiction and Amazon announced their plans for a sequel to the award-winning spy thriller, Deutschland 83. Produced by UFA Fiction, Deutschland 86 will premiere exclusively on Amazon Prime Video in Germany in 2018.

RTL Television – which commissioned Deutschland 83 and aired the first season – has secured a first-look option for the linear TV rights, and plans to air the sequel on German free-to-air TV after Amazon’s first window. FremantleMedia International, FremantleMedia’s global distribution arm, will continue to sell the high-end drama series to broadcasters and streaming services around the world.

In January 2016, Deutschland 83 became the UK’s highest ever rated foreign-language drama launch. The series has been sold to 38 TV channels and video platforms, and enjoyed by viewers in more than 110 territories.

THE
YOUNG POPE

UNCONVENTIONAL.
PROVOCATIVE.
CONTROVERSIAL.

UNCONVENTIONAL.
PROVOCATIVE.
CONTROVERSIAL.

From Academy Award-winning director Paolo Sorrentino, the highly acclaimed ten-part series, The Young Pope, features a star-studded cast, including two-time Oscar-nominated Jude Law as Pope Pius XIII and Oscar-winner Diane Keaton as Sister Mary. The Young Pope tells the controversial and addictive story of how US-born Lenny Belardo becomes the first American Pope in the history of the Catholic Church.
The first season of the hotly anticipated series – produced by FremantleMedia-owned Wildside – premiered at the Venice Film Festival in September 2016 to much acclaim. A month later, the series began its international roll-out, premiering on Sky Atlantic in Italy, the United Kingdom, Germany, Ireland and Austria, on Canal Plus in France, and in January 2017 on HBO in the United States.

AMERICAN GODS

YOU ARE WHAT YOU WORSHIP

In 2016, FremantleMedia North America produced fantasy drama American Gods – a TV adaptation of Neil Gaiman’s international bestseller. American Gods tells the story of a war brewing between old and new gods. The traditional gods of biblical and mythological times are steadily losing believers to a new breed of gods who reflect modern society’s love of money, technology, media, celebrities and drugs.

The protagonist, Shadow Moon, is an ex-convict who becomes bodyguard and travelling partner to Mr. Wednesday – ostensibly a conman, but in reality the Norse god Odin, who is on a mission to gather forces to battle the new gods.

Neil Gaiman’s novel on which the show is based has been translated into over 30 languages, and earned numerous accolades. With the production of American Gods, FremantleMedia continues its push into high-end drama. The global production company holds the international distribution rights for the series.

In August 2016, FremantleMedia International announced a deal with Amazon to showcase American Gods on Amazon Prime Video in 2017. The show will be available on Amazon’s SVOD platform in over 200 territories following its US premiere on the pay-TV channel, Starz.

Glacé attracted
an average
audience share of
16 per cent

Glacé

CHILLING
DRAMA

Production of Glacé, an unsettling thriller, began in 2016. Voted best series at the La Rochelle TV Fiction Festival, Glacé was directed by Laurent Herbiet and produced for M6 by Gaumont Television. Adapted from the French bestseller by Bernard Minier, the series comprises six 52-minute episodes, and follows a chilling investigation where four characters with interlinked destinies see their past come back to haunt them.

Investigation started after the body of a decapitated horse was found hanging up on the mountainside at the top of a ski lift in the Pyrenees - and it became more complex than expected.

Calamity and
Family Drama

Zwarte Tulp

The curse appears to have been banished to the past, and the two families seem to have settled their differences… but nothing is as it seems. With lust, drugs, death, and even paranormal nightmares to contend with, their seemingly peaceful coexistence is on a knife edge.

Zwarte Tulp (Black Tulip) was the first series produced exclusively for RTL Nederland’s Videoland. The second season of the drama – which premiered in May 2016 – went on to become one of the platform’s most popular series.

The first season of Zwarte Tulp aired on RTL 4, where it drew an average audience share of 19.9 per cent in the target group of shoppers aged 20 to 49.

Weemoedt

Weemoedt

The Dutch drama series Weemoedt was launched on Videoland in September 2016. Based on the novel by Thijs Römer, it was the first series produced by RTL Nederland’s new drama unit for the video-on-demand service. The story follows the exploits of Job Weemoedt, talent manager at an Amsterdam-based agency, as he navigates the snake pit of the entertainment industry. Weemoedt lifts the lid on the world of showbiz, and gives viewers a peek into the heart of a man who goes off the rails and allows the love of his life to slip through his fingers. The series will also be broadcast on RTL 5 from spring 2017.

Karl May’s heroes returned to prime‑time TV

The myth lives on

Karl May
In December 2016, RTL Television brought the story of Karl May’s Winnetou back to life. The trilogy tells the story of fictional Native American Winnetou and his blood brother Old Shatterhand, based on May’s novels, which were a classic in German literature and on TV.

The remake aimed to share the Winnetou stories with a new generation of young viewers, using the biggest stars and giving the films a contemporary look and feel – faster, raunchier and dustier.

The event-trilogy attracted an average audience share of 16.1 per cent of the 14 to 59 target group.

Club der roten Bänder

A roller coaster of emotions

The long-awaited second season of the popular Vox series, Club der roten Bänder (Red Bracelets) returned to screens in November 2016.

The show, which is based on the real-life experiences of Spanish author, Albert Espinosa, has been a major hit in Germany, and secured several awards, thanks to its emotional, life-affirming stories and outstanding young cast. The second season built on the popularity first season and even increased its share of the 14 to 59-year-old target audience to 14.0 per cent. With an average 37.7 per cent market share among women aged 14 to 29, Club der roten Bänder became by far the most successful series of the year in the female demographic. Vox has confirmed the production of the third and final season of the series.

WHEN BROTHERS BECOME COMPETITORS

DUELL DER BRÜDER

Duell der Brüder Duell der Brüder
In March 2016, RTL Television aired Duell der Brüder – Adidas gegen Puma, a compelling drama that tells the tale behind two world-famous sporting brands.

The TV movie tells the story of the Dassler brothers, Adi and Rudi, visionary pioneers who realised their entrepreneurial dream of growing their sports shoe business from humble beginnings into the mighty Adidas and Puma – Germany’s most ambitious sports footwear brands. But the brothers soon grew apart, in both their private lives and business activities. Together with the documentary broadcast after the film, the Dassler brothers became a ratings hit on RTL Television.

Scoring high

with Football

According to the 2016 TV Key Facts published by RTL Group’s international advertising sales house, IP Network, sports were the most watched genre in 2015. Thanks to the Olympic summer games in Rio de Janeiro and the Uefa European football championship, 2016 was no exception.
Live sporting events continue to draw record audience ratings for TV broadcasters – bringing people together in front of the action.

In 2016, M6 and RTL Television scored big with France’s and Germany’s favourite sport – football.

Football nets record audience goals for M6

It was as exciting as it could get with Portugal winning the Uefa Euro 2016 against host-nation team Les Bleus at the Stade de France on 10 July 2016. France may have lost the match but M6 scored big, broadcasting the final and another 10 matches of Europe’s biggest tournament.

The Portugal vs France final achieved the same ratings as Brazil vs France in the 1998 World Cup final – 20.8 million viewers, or 71.8 per cent of the total audience: making it the competition’s most popular broadcast.

The match netted the channel’s best ever rating, and the fifth largest French TV audience in history. But M6 didn’t stop there. The channel introduced innovative features to its Uefa Euro 2016 programming, giving viewers an up-close-and-personal experience of the tournament and teams using virtual reality images and ‘teleportation’ effects and holograms.

In contrast to the classic duplex method, teleportation effects provide a more direct and realistic picture, to bring interviews with the players to life – almost as though viewers were right there with their football heroes. The method, which was used for the first time during the tournament, was an outstanding achievement for M6, and the pioneering channel was awarded the Trophées Think Football for innovative broadcast technologies as a result.

M6

The Portugal vs France final reached 20.8 million viewers, or

71.8

per cent of the total audience

In 2016, RTL Television aired four World Cup qualifiers featuring the German national team, netting an average total audience share of 29.2 per cent or

9.2 million viewers

RTL Television teams up with
Die Mannschaft

Die Mannschaft
Live sporting events remain an important part of RTL Television’s programme line-up after the channel celebrated outstanding ratings broadcasting the European qualifiers in 2014 and 2015. In May 2016, the TV channel signed an exclusive broadcasting rights agreement with Uefa to air 28 of the 40 matches the German national team will play until 2022 – including all the team’s Euro 2020 qualifying games and World Cup 2022 qualifiers.

Following the Uefa 2016 European Championship, the next major milestone on football fans’ horizon is, of course, the World Cup 2018 – the German national team is ready to defend its world cup title.

RTL Television was the perfect partner to broadcast Die Mannschaft’s trip to Russia. In 2016, the channel aired four World Cup qualifier matches from Team Germany, which reached an average of 9.2 million viewers – 29.2 per cent among the total audience. The most-watched tournament was the match between Germany and Northern Ireland on 11 October 2016, which attracted over 10 million total viewers – 30.6 per cent of the target group.

Football fans who couldn’t get enough of the Uefa coverage were able to follow the top qualifying matches without German participation on RTL Nitro.

THE POWER OF

Online video

Have you heard of Cameron Dallas? Millennials sure have. The 22-year-old is one of the world’s biggest social media superstars, with over five million YouTube subscribers, 16 million Instagram followers, nine million Twitter followers and over three million Facebook fans... and is one of StyleHaul’s newest faces.

In November 2016, Cameron signed with the fashion, lifestyle and beauty network StyleHaul to expand its footprint and develop fresh and original content. Custom-tailored partnerships with the world’s leading social influencers give brands and marketers the chance to generate high reach in the coveted millennials target group. But multi-channel networks (MCNs) do more than influencer marketing – they harness the power of online video to create tailor-made branded content and channels. Our investments in the leading MCNs – BroadbandTV, StyleHaul and Divimove – are enabling RTL Group to become a leading player in the online video and YouTube ecosystem, and helping to make us the strongest and most international online video operator of all broadcast groups in Europe and the United States.

In this rapidly evolving market, the meaning of TV has changed to ‘total video’. TV no longer exclusively represents the TV set in the living room, instead it represents the wide choice of content the Group offers its viewers – not only on linear TV but also online.

Although television remains at the heart of RTL Group’s strategy, digital has become a strong third pillar – and with a 10.7 per cent revenue share, one of the growth drivers of RTL Group’s total revenue.

A stylish
relationship

As part of its newly minted partnership with Verizon’s Go90 platform, StyleHaul has launched its second scripted series, Relationship Status. The dramedy follows the lives of a group of 20- to 30-somethings as they navigate the complexities of dating and relationships in the social media age. Told through the lens of social storytelling, Relationship Status is optimised for mobile consumption, using its medium to elevate its message. Verizon Go90 confirmed the return of the social media drama for two more seasons.

A message from
the RTL Digital Hub

In September 2016, members of the RTL Digital Hub presented its market-leading positions to international marketing specialists and advertisers at the dmexco conference in Cologne, Germany. The CEOs of BroadbandTV, StyleHaul and Divimove presented the latest trends in digital marketing, and gave inspiring insights on how to boost marketing campaigns using creative storytelling in online video.

Jumping through hoops
to satisfy
millennial viewers

2016 was a big year for BroadbandTV: as well as being ranked as the largest multi-channel network (MCN) in the world, it was also the fastest growing. Recognising the expertise offered by the MCN, the National Basketball Association (NBA) extended its partnership with BroadbandTV to launch NBA Playmakers – a groundbreaking community for video creators focused on basketball and basketball culture. The first-of-its-kind millennial video network gives the creator community and NBA fans the chance to produce basketball-related content and share it across the NBA Playmakers network, spanning YouTube, the NBA’s digital assets, and other platforms.
Divimove
Divimove

First ever helicopter penalty shoot-out with Mario Balotelli

To mark the official launch of a new football boot model, Divimove’s online video creative agency Brandboost has developed and produced a two-part online video series for Puma France, where content creator Birdyy competes with Italian football star Mario Balotelli. Within 24 hours of release, they had been viewed over 700,000 times and generated a high engagement. The releases were backed up by posts from social influencers on other social networks such as Instagram and Twitter, to create a wider reach and generate more attention for the videos.

under
the
spotlight

Stylehaul
In April 2016, StyleHaul teamed up with the singer and social media phenomenon Pia Mia Perez and leading retailer Macy’s to produce a six-episode digital docu-series. The series, which follows Pia Mia’s daily life, was created to promote the new Material Girl fashion line from international superstar Madonna, with Pia Mia wearing pieces from the Material Girl collection in every episode. Links below each video allow viewers to find and buy the clothes directly online.
Stylehaul
Confessions

A mix of drama, love,
romance and wit

In April 2016, FremantleMedia India launched its first web series Confessions – It’s Complicated exclusively on Facebook. The show quickly gained popularity, drawing more than 11 million views. The series used Facebook Live to enable people to share their experiences and perspectives in real time. Confessions – It’s Complicated follows the exploits of Sameera Saxena, Raka Ghosh, and Nupur Murthy, three 20-somethings fresh out of college and raring to fly out of their nests to live in the city of dreams – Mumbai.
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Confessions

A mix of drama, love,
romance and wit

In April 2016, FremantleMedia India launched its first web series Confessions – It’s Complicated exclusively on Facebook. The show quickly gained popularity, drawing more than 11 million views. The series used Facebook Live to enable people to share their experiences and perspectives in real time. Confessions – It’s Complicated follows the exploits of Sameera Saxena, Raka Ghosh, and Nupur Murthy, three 20-somethings fresh out of college and raring to fly out of their nests to live in the city of dreams – Mumbai.
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Our
Business Model
Our Strategy

We are
leaders across
broadcast,
content, digital

OUR BUSINESS MODEL

BROADCAST

TV
and radio

CONTENT

production
and
distribution

DIGITAL

especially
online video

The value chain of
the ‘total video’ market

Content production

Aggregation

Distribution

Monetisation

DOWNLOAD THE PDF AND LEARN MORE
ABOUT OUR BUSINESS MODEL AND THE ROLE OF THE GROUP.

Our Strategy

Four key trends
shaping RTL Group’s strategy

Competition

Convergence

Complexity

Consolidation

THREE PRIORITIES FOR LONG-TERM GROWTH

1 — CREATE MUST-SEE TV
2 — GROW AUDIENCES
3 — CAPTURE THE VALUE OF DIGITAL

DOWNLOAD THE PDF TO FIND OUT
ABOUT THE THREE KEY TRENDS SHAPING RTL GROUP’S STRATEGY AND THE THREE PRIORITIES FOR FURTHER GROWTH.

MONETISATION OF ‘TOTAL VIDEO’

WANT TO KNOW WHAT HAPPENS, WHEN YOU WATCH A VIDEO ONLINE AND A SPECIFIC AD IS SHOWN?

DOWNLOAD THE PDF AND LEARN ALL ABOUT ADVERTISING TECHNOLOGY.

Ad Tech
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How

RTL Group

gives back to society

As a major opinion former and information provider, RTL Group has a social and economic responsibility towards many different stakeholders. Click below to read more about our role in society.
RTL Group’s CR Report 2016 provides information on the basic principles and most relevant issues of the Group’s CR efforts.

Chairman’s
statement

Thomas Rabe

Chairman of the Board of Directors

RTL Group looks back on a successful business year. In 2016, both our reve­nues and EBITA rose to new highs – not least thanks to one of the highest organic growth seen in many years, and another record year at Mediengruppe RTL Deutschland. We also made strategic progress across the Group to become more digital, more international, and faster growing.

Our broadcasting business once again delivered a strong performance, first and foremost Mediengruppe RTL Deutschland, which not only grew its revenues again, but also improved its EBITA for the fifth consecutive year.

In 2016, the team in Cologne generated higher income from TV and digital advertising, as well as higher platform revenues. Although big sporting events such as the Olympic Games and the Uefa European Football Championships were largely shown by the public service broadcasters, our family of channels recorded a stable audience share in the main target group of 28.4 per cent, doubling its lead over its biggest commercial competitor to 3.1 percentage points.

Groupe M6 also had a strong year with revenues and earnings growth, attributable to higher TV advertising revenues and a positive effect from the gradual phase-out of the M6 Mobile contract. Our flagship channel M6 increased its average market share to 16.0 per cent, profiting from its broadcast of eleven European Championship matches, which achieved an average total audience share of close to 40 per cent.

Outside Germany and France, our key European TV advertising markets mainly developed positively. This benefited our respective families of channels, which we have expanded by launching new channels in Germany and Croatia.

In the area of content, FremantleMedia successfully expanded its prime-time drama business. Despite a slight dip in revenues, FremantleMedia achieved a higher EBITA. In addition, our production companies celebrated a raft of creative and commercial successes. The UFA Fiction series Deutschland 83 inspired audiences and critics worldwide, as did the Wildside production The Young Pope, which premiered at the Venice Film Festival and was rolled out in almost 200 territories by FremantleMedia International and co-producing partners. Beyond this, FremantleMedia took over the production company Abot Hameiri, and acquired holdings in Dr Pluto, Wild Blue Media, and Dancing Ledge.

Our digital businesses made significant progress. Fuelled by strong organic and acquisitive growth, they contributed more than 10 per cent to RTL Group’s total revenue. Their revenue grew by 32 per cent to € 670 million. The BroadbandTV, StyleHaul and SpotX businesses bundled in the RTL Digital Hub, all of which showed dynamic growth, were key contributors to this. Moreover, Mediengruppe RTL Deutschland strengthened its position in the digital advertising sector by acquiring a majority stake in the online video advertising sales house, Smartclip.

“our creativity and innovative
spirit help us entertain, inform, and
engage millions of viewers,
listeners, and users around the globe.”

This progress throughout 2016 shows that the Board of Directors helped to initiate and supervise a multitude of measures to further develop RTL Group along its three strategic pillars: broadcast, content and digital. We intend to build on this success in the years ahead.

We will do so with a changed executive management team – one which will ensure long-term continuity in the leadership of the Group. Anke Schäferkordt, Co-CEO of RTL Group, has decided to focus on leading Mediengruppe RTL Deutschland and on serving as a member of the Bertelsmann Executive Board. She will leave our Group’s Board of Directors and Executive Committee at her own request, with effect from the Annual General Meeting on 19 April 2017. Bert Habets, currently CEO of RTL Nederland, will become the new Co-CEO of RTL Group and will join the Group’s Executive Committee, alongside Co-CEO Guillaume de Posch and CFO Elmar Heggen.

Together with almost 13,000 employees, we will continue to build on RTL Group’s tremendous success. The most important foundations for continuing to be faster-growing, more digital, and more international, are our creativity and innovative spirit. They help us entertain, inform, and engage millions of viewers, listeners, and users around the globe – and I am pleased that you are following us on this path.

Chairmans’s signature
Thomas Rabe
Chairman of the Board of Directors
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Financials

Download
the financial information
from RTL Group’s Annual Report 2016
in one PDF file: Directors’ report,
Consolidated financial statements
and the Auditors’ report.

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