RTL Boss Bemoans Weak U.S. Series, Piracy Dangers

RTL Television CEO Anke Schaferkordt sees rebound in local production at MIPTV.

As the U.S. Studios decend on international TV market MIPTV in Cannes to hawk their latest series and feature films to global broadcasters, The Hollywood Reporter's German bureau Chief Scott Roxborough sat down with Anke Schaferkordt, head of Europe's number one commercial network RTL to talk business.

The Hollywood Reporter: A few years ago, U.S. series and films dominated European primetime. But there haven’t been any new global hits out of the U.S. for years and even once mighty series like House are in decline. Does this worry you?

Anke Schaferkordt: We’re not happy about it. And you’re absolutely right. The last few years we haven’t seen any of the hit shows – like House, like CSI. We haven’t had a new U.S. series that could reach such a broad audience in Germany.

And we see that – as in other European markets – that when the U.S. series weaken, the local production improves to take its place. There’s been a revival of German series. That more than compensates for the decline in U.S. series. In the younger demographic (14-49), RTL's audience share in 2010 was 18.1 percent. Last time we spoke I wondered if we could crack 17 percent market share could be broken. Now we’ve got 18 percent.

 For the first few months of this year – OK we won’t keep up that pace, that’s impossible, we had an amazing start - but we had 21.2 percent in January. The last time we had that was 1995! If you asked me two years ago if we could have ever reached that level again I would have said no.

So it’s a shame that there haven’t been any new U.S. series coming down the pipe that that have the potential to draw 18 percent in primetime, but we’re aren’t as dependent as other German channels because we’ve compensated with our own production.

THR: Hollywood blockbusters also aren’t the audience draw they once were. How much is that due to piracy sites, particularly ones targeted at German viewers, like Kino.to?

AS: If you could see the back of my neck now – the hairs are standing on end. Just hearing that name! Look, it goes without saying these sites are illegal and that’s is punishable by law. But, in the case of Kino.to we can’t stop it because it’s not in Germany. That's very bitter for me. It's very hard to measure the impact. One thing we have seen is that the audience for feature films in TV has declined steadily over the last 10 years.

10 years ago on a hit list of the top rated TV programs in Germany – films were right up there. That’s not the case anymore. Now it’s sports, big live shows, not the big films. That’s not just because of piracy – early DVD releases has also impacted that. But piracy has sped up the trend.

So we have to work with the U.S. studios and fight this illegal theft. Because it’s not just damaging theatrical and DVD revenue but also TV license revenue. Eventually German channels - and not just German - won’t be willing to pay these kind of license fees for feature films.

THR:You've tried to combat piracy with your own online catch-up services. But your plans to set up a joint online platform for catchup TV with broadcaster ProSiebenSat.1 were just rejected by the German cartel office.

AS: We’re checking that and we’ll probably take legal action to challenge it because we don’t agree with them. But that’s not the end of catch up TV for us, of course. It couldn’t be. Our own platforms (RTL Now, Vox Now, Super RTL Now) are established. But it’s a shame because it would be more comfortable for viewers to have one address for all German speaking TV-catch up offerings. This decision favors other content providers, particularly foreign competitors.

THR: Piracy hasn't seemed to impact RTL's bottom line. Ad sales were up strongly last year and earnings near record highs. Does this mean the crisis is over?

AS: Yes, the ad market came back incredibly strong in 2010 but it couldn’t compensate for what was lost in 2009. The gross numbers look great – 16 percent growth – net growth was a lot less. The year before there was a 10 percent drop in net growth. We still aren’t back to the level of 2008.

For this year – there are no clear indications. Our advertising clients are reacting very differently to developments in Japan and Libya. I can’t say what will happen. In Germany the economic indicators are good, although for the first time for a long time we see a small decline in consumer confidence, probably the first reaction to events in Japan. But we’ll see whether there will be an effect on the advertising market in April and in the fall.

I wouldn’t want to give a prognosis for this year. I’m cautiously optimistic but I don’t’ think we’re going to see the kind of growth we saw in 2010. We’ll probably have to wait before we return to the heights we saw in 2008.

THR: Aside from piracy, what keeps you up at night?

AS: I’ve sleeping well at the moment. But there are things that hold my interest. Like in five years’ time – how will viewers work with hybrid devices – where you have TV and Internet on the same device?

At the moment, classic TV is stronger than it’s ever been. Last year – it doesn’t matter what demographic you look at - we had the highest TV use in the history of television in Germany. Even the younger audience, that everyone said was drifting away from TV, those figures are up.

We’ve never agreed with those that said TV wouldn’t be the primary medium. I believed and I still believe at least for the next five years that linear TV will remain absolutely dominant in the market.