RTL has eye on digital

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COLOGNE, Germany -- German broadcaster RTL is getting out of the home shopping business to focus on digital growth opportunities, especially social networking -- a field that German media giants are scrambling to enter before foreign competitors get a foothold here.

RTL Television and its new-media division RTL interactive are selling off their jointly controlled, but unprofitable home shopping network RTL Shop, the companies said Wednesday.

Major German retail groups are expected to be among the top bidders. Leading European retailer Arcandor, which owns Germany's KarstadtQuelle department store chain, recently acquired teleshopping network Home Shopping Europe.

The move by RTL comes after the recent sale of the firm's dating channel Traumpartner TV.

RTL Television holds 55% of RTL Shop, with RTL interactive controlling 45%. RTL said it might keep a minority stake in the channel.

RTL Shop broadcasts home shopping shows 24/7 on cable, via satellite and on the Internet. The channel also has an early morning broadcast window on free TV network RTL Television. While home shopping remains a growth business in Germany, RTL Shop has been a money loser since its launch in 2001.

Meanwhile, the group is investing heavily in its online business.

RTL interactive has taken a 49% stake in Wer-Kennt-Wen (Who-Knows-Whom), one of Germany's fastest-growing social networking sites with about 1.3 million registered users. That compares with about 650,000 for Lokalisten, the German-language Facebook clone controlled by RTL competitor ProSiebenSat.1. The market leader is StudiVZ, which is controlled by German publisher Holtzbrinck and boasts 3.5 million registered users in Germany.

"Social communities are an important trend and an interesting business segment," said Johannes Zull, managing director of RTL Interactive.

Such online enterprises promise exponential audience growth and access to Germany's booming online ad business at a time when the country's broadcasters are scrambling to establish their brands online before the wave of international Web 2.0 companies flood the local market.

For example, MySpace has a German-language version of its site, but so far lags behind homegrown operations. Facebook plans to launch a German site this year.
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