RTL CEO Bert Habets on Record Results, 'American Idol' Reboot and Taking on Netflix in Europe

Bert Habets, CEO RTL Group
RTL Group

After his first six months as sole head of Europe's largest TV group, Habets reflects on the challenge of his European VOD push, the relaunch of 'American Idol' and why he won't be buying many shows from the U.S. in the future.

It's been a good couple of months for Bert Habets.

Since he took over as sole CEO of RTL Group in December, the Netherlands-born Habets has had the unenviable task of trying to transform the business of Europe's largest free-TV broadcaster to make it fit for the future.

RTL, which operates some 61 TV channels, including European giants RTL TV in Germany, M6 in France and Antena 3 in Spain, built its business on the ad-supported model of 20th century TV, a model that's increasingly under threat from the likes of Netflix and Amazon Prime as viewers shift to a bespoke, on-demand world.

RTL's channels — eight of which are the number one or number two commercial broadcasters in their respective territories — also face challenges on the content side. RTL has traditionally relied on the U.S. studios for many of their top series. But Europeans no longer want American series as they once did. And the ones that do can find more than enough U.S. fare on smaller, pay TV outlets or, again, on Netflix.

The challenge for Habets is to shift RTL away from its old business toward a new one, more focused on VOD — the company has launched or expanded several on-demand services in Europe recently — and on in-house production, while still relying on old-school TV advertising for the bulk of its revenue.

Judged by RTL's first-half financials, published this week, Habets is on his way. The company reported record revenue of $3.55 billion (€3.046 billion), an 2.3 percent increase from the same period last year, with operating profit (EBITDA) up by 1.9 percent to $743 million (€638 million).

Most promising was RTL's revenue split, which was more diversified than at any time in the company's history. TV advertising contributed 47.7 percent of the financials, with 18.7 percent coming from content sales (RTL owns FremantleMedia, the producer of American Idol and The X Factor) and 13.9 percent from digital operations. RTL is still very much a free-TV group, but its starting to look more and more like a digital content company as well.

“We're well on our way,” Habets told The Hollywood Reporter shortly after announcing the half-year figures. He pointed to the rollout of European VOD platforms as one of RTL's biggest endeavors, and greatest challenges, as it tries to become, in the company's parlance, no longer a traditional TV company, but a "total video" one.

In April this year, RTL Netherlands saw rapid growth of its VOD subscriber service Videoland, which is to be merged with RTL's on-demand ad-financed platform RTL XL. Videoland recorded paid subscriber growth of 122 percent and total subscriber viewing time increased by 204 percent in the first six months of 2018. In Germany, RTL is rebooting its local VOD platform TV Now; and in June, its French network M6 announced a collaboration with France Televisions and Groupe TF1 to build Salto — a joint French online video platform providing news, including magazines and special events, sport, entertainment, French fiction, U.S. series, documentaries and films.

"Scaling up our VOD offerings is the biggest challenge as we go forward,” Habets said. “In the Netherlands we have had success with a hybrid model of an advertising supported and pay service, which we will now combine into one integrated offer. We're also building up our service in Germany, TV Now, and we will roll out such hybrid services in all territories where we have a strong position in the TV market, focusing on local and exclusive content across all genres."

While loath to put a figure on the company's VOD investment, Habets said RTL would be spending around €100 million ($116 million) “over the next few years” on original and exclusive content for its on-demand services, with investment scaling up as the services expand. The group is also plowing cash into the back-end technology behind its digital platforms.

When it comes to supplying content for its channels, traditional or digital, ad-supported or subscription, RTL increasingly wants to do it alone. "For some years, we've been scaling back on our U.S. output and volume deals across our broadcasting footprint,” says Habets. Fewer American shows, more made-in-Germany, made-in-France and made-in-Holland series and entertainment programming has been the order of the day.

Ideally, that content comes directly from FremantleMedia, RTL's production arm. The group that made a name with shiny floor entertainment shows Idol, X Factor and Got Talent, has also begun a major push into scripted series, with the likes of HBO's The Young Pope and upcoming Italian series My Brilliant Friend, Starz's fantasy epic American Gods and the Australian miniseries Picnic at Hanging Rock, starring Natalie Dormer of Game of Thrones

But the successful relaunch of American Idol stateside on ABC — Idol was a main driver behind second-quarter growth of 3.6 percent to $1.9 billion (€1.63 billion) — shows that Fremantle has no plans of abandoning entertainment TV.

"Scripted content is a new strategic focus at Fremantle, but needless to say we also continue to invest and nurture our big entertainment formats, such as Got Talent and X Factor,” Habets says. “The relaunch of American Idol was not a one-off. We have significantly invested into the relaunch of the show to see consecutive seasons in the next years. And ABC has already commissioned a second season.”

As the new boss at RTL, Habets has had a couple of good months. But the challenges facing the European TV giant are similarly enormous. It will be several more months, and years, before it's clear if Habet's “total video” strategy pays off.