Bertelsmann: “Europe should consolidate streamers”

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Thomas Rabe, chief executive and chairman of Bertelsmann says regulators should allow European media companies to scout mergers and partnerships to enable them to compete with US streaming giants such as Netflix and Disney+.

Rabe told the FT that the economic impact of coronavirus on the industry had strengthened his view that it will be necessary to redraw the European media landscape.

“There is a strong case and a need for consolidation,” he said. “I’m convinced that partnerships are more important than ever, especially after the coronavirus, which hurt European TV broadcasters and has helped the US streaming platforms.”

US streaming services have seen their subscriber numbers and revenues boosted as lockdown measures around the globe meant millions more turned to watching content online. Although audiences also grew among European TV broadcasters for the same reason, these groups have suffered from a sharp drop-off in advertising. Last week, for example, Bertelsmann division RTL Group reported a 16.4 per cent fall in revenue to €2.7bn in the six months to June. Net profit slumped 65 per cent to €156 million.

Rabe, who also chairs RTL, did not offer an annual forecast saying that conditions remain unpredictable because of the pandemic, although he believes future lockdowns are more likely to be local than national as governments focus on rescuing their battered economies.

But he added that the rise of US streaming services will be a challenge that outlasts the crisis, and urged European regulators not to adopt strict interpretations of competition law in order to take into account a new era of competition.

“We should be allowed to create national TV champions,” he said, adding that RTL was “open-minded to exploring such possibilities” in the markets where it operates.


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