Germany’s FAZ newspaper is reporting that commercial broadcaster RTL is to increase its investment in VoD for mass audiences.
In an interview with RTL’s CEO Bert Habets it was revealed there are also plans to expand TV Now, its digital service in Germany which will include more local content to turn it into a ‘household name brand’.
Investment bank Exane/BNPP says one of the reasons that RTL has outperformed other German commercial broadcasters has been that their championing of local content while direct competitors like Pro7 have relied heavily on US film and drama blockbusters, and where competition from Netflix, Amazon and pay-TV is fiercest.
“Although RTL operates in a challenged environment, it offers relative safety. Increasing digital investments is a sensible strategy but [we] suspect their on-demand platform will not be able to compete with the ease of use of Netflix’s VoD platform given the scale of investment required. Creating must-watch local content remains key to retaining TV ad revenues,” says the bank’s note to clients.
“Nonetheless, we like management’s pragmatism with regards to structural challenges and the efforts to adapt to this fast changing environment, while the top line should accelerate. We see RTL as one of the best/safest plays in what is a difficult industry. Given that management previously said at their full year results would be a year of investments, in online video in particular this news should not disturb the stock price materially.”