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German Cartel Office Rejects RTL/Pro7‘s Hulu Clone

Competition authorities argued it would extend RTL and ProSeiben’s market dominating duopoly in the TV advertising business.

 

BERLIN -- Germany’s cartel office has rejected plans by the country’s two largest commercial broadcasters -- RTL and ProSiebenSat.1 -- to set up a joint online video platform in the style of U.S. TV streaming site Hulu.

Germany’s competition authorities on Friday rejected the planned platform, arguing it would extend online RTL and ProSeiben’s ”market dominating duopoly” in the television advertising business. Together, RTL and ProSieben’s network of commercial channels represent more than 75 percent of Germany’s total TV ad market.

RTL and ProSieben reject the office’s claims and say they will fight the decision in court.

Both broadcasters insist their online platform would be open to all German channels, public or commercial. RTL and ProSieben’s proposal would have seen the two networks jointly run a digital service company that would manage the technical infrastructure for the streaming portal. Participating broadcasters would control the content -- and any online advertising -- on the site’s individual channels.

In a letter to the networks earlier this year, the cartel office complained that the planned portal must be open to all providers of online video. RTL and ProSieben argue this would devalue the platform, making it closer to YouTube than Hulu.

The ruling, while expected, is a blow to RTL and ProSieben’s hopes to occupy the online streaming space before U.S. competitors move in.

Hulu, Google, Apple and others are rolling out their online TV offerings across Europe, worrying local broadcasters who fear the new streaming sites will draw viewers away from their sets.

The bigger European networks have a window of opportunity to set up their own online beachhead since they control digital rights to much of the most lucrative video content -- including local language rights to most big U.S. movies and series. RTL and ProSieben already offer their content for ad-backed streaming or pay-per-view VOD online on their own proprietary sites. But so far Germany lacks a legal one-stop shop for high-quality online video.