European RTL Group to Spend $400M on Streaming Programming Over Next 3 Years

RTL Group
RTL Group CEO Bert Habets

The broadcasting giant, owner of 'American Gods' producer Fremantle, is betting big on its home-grown alternatives to Netflix and others.

RTL Group, Europe's leading commercial television company, said Thursday it would invest close to €350 million ($400 million) over the next three years in building up its VOD services, with the bulk, some $340 million, budgeted for content production and acquisition.

The announcement is a sign that RTL is serious in its push to transform its core business from advertising-supported free TV to a vertically integrated studio producing and distributing its own content across all platforms, over the air and online.

RTL CEO Bert Habets, who took over the running of the company two years ago, has shifted its focus away from the licensing of mainly U.S. series and films for its European channels towards original production, much of it targeting local European audiences. He also has stepped up the company's online push, with VOD services in Germany (TV Now) and the Netherlands (Videoland).

By the end of last year, RTL Group had 1 million paying subscribers for its SVOD services across Europe, a 76.7 percent jump on a year earlier. Videoland saw an astounding 135 percent jump in subscribers, something RTL attributed to local hit formats such as the reality show Temptation Island VIPs

“Every investment in local, exclusive content is an investment for the long run, strengthening both our linear TV channels and streaming services,” Habets said Thursday, noting that the company was shifting away from U.S. acquisitions towards exclusive, in-house production through its subsidiaries such as Fremantle, producer of American Gods, and Italian group Wildside, which produced My Brilliant Friend and The Young Pope for HBO.

“Over the next three years, we aim to grow our total number of paying subscribers to at least 3 million,” said the CEO. “This growth will help to further diversify RTL Group’s revenue streams. With Fremantle we continue our push into drama production. As drama series are also key for the expansion of our streaming services, we have developed an ambitious growth plan for scripted series.”

Habets said Fremantle is currently working on at least 35 international scripted projects and that the production division will generate more than €500 million ($565 million) in revenue by 2021, up from $340 million last year. Fremantle has set up a VOD working group with RTL's flagship broadcasters across Europe to explore the joint development of high-end drama series.

In a bid to boost production, Fremantle will pursue more first-look deals, such as its recent agreement with Fabula Pictures, producers of Oscar winner A Fantastic Woman, and its multiyear deal with Game of Thrones actress Natalie Dormer, who will exclusively co-develop a slate of drama series with Fremantle. Dormer starred in Fremantle's Australian period miniseries Picnic at Hanging Rock.

Habets also noted that RTL was in discussions with new online platforms "such as Apple" for its original content, "so the range of activities continues to expand,” he added.