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What it means when a broadcast giant pursues digital equality

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Investments in MCNs like StyleHaul means RTL Group is reaching young audiences through new stars, like Joey Graceffa from the ‘Storytellers’ series

Linear television remains the king of advertising, despite audience fragmentation and more on-demand viewing. It gives marketers what no other video-centric medium can: the ability to get their brand messages to a huge number of people very quickly. This is especially true for events-based television, whether live sports or talent shows like ‘The X Factor’. There is no alternative to linear TV – nor will there be in the foreseeable future.

These are the views of RTL Group and nobody can accuse the media giant of sticking their heads in the sand. When it comes to thinking about the future and planning for it, the company has treated digital distribution as the equal of television distribution and content production ever since 2013 and it has backed its digital strategy with major investments in MCN (multi-channel network) content (Broadband TV, StyleHaul and Divimove) and advertising technology (SpotX, Clypd and VideoAmp). 

The company is deliberately reaching out to millennials and Generation Z: witness the recent involvement of its French broadcaster, Groupe M6, in a Paris gathering of YouTube stars and 20,000 of their fans. As co-organiser of the Vidéo City Paris event in early November, M6 Digital Talents provided visibility for its own digital efforts but was also able to meet the people that make up an increasingly hard-to-reach youth demographic and hear their voice. 

Vidéo City Paris is a dedicated show for web content creators, based on VidCon in the United States, and RTL Group was also represented by the Divimove network, the leading European MCN and a subsidiary of RTL Group’s content production arm FremantleMedia. 

Meanwhile, at the end of November, Golden Moustache (a Groupe M6 brand) published its first feature film. Produced by Golden Moustache and directed by the Suricate collective, ‘Les Dissociés’ has been made available simultaneously on the GoldenMoustache.com website and on YouTube for free. Golden Moustache is reinventing the rules of feature films, RTL reckons, saying “the humorous platform with two million subscribers turned into a genuine movie studio with the filming of this first French Internet film.”

FremantleMedia is a key part of the RTL Group’s drive into digital. The company has been making so much digital content in North America, for example, that it has now created a studio dedicated to these efforts, called Tiny Riot! Tiny Riot! develops and produces original content for its own MCN channels like The Pet Collective and the Munchies online food channel. It has content deals with StyleHaul and BroadbandTV and is also developing digital content around ‘traditional’ FremantleMedia TV properties like ‘Family Feud’.

This is one example of where the lines between the new world and the old world are starting to blur. Another is the way that some YouTube talent within the various RTL Group subsidiaries is being readied for wider audiences, like Joey Graceffa, a YouTube superstar with over 5 million subscribers, 12 million social followers and over 603 million views on his YouTube channel. The second season of his digital series ‘Storytellers’ will arrive next year on StyleHaul. 

Graceffa’s character and his college friends “have to deal with their expanding personal magical powers, supernatural forces of good and evil and the threats of parallel universes, in addition to everyday college issues of identity, friendship, and romance.” If that does not sound enough like television, then how about the fact that it is being made in six half-hour episodes. Graceffa has already helped to promote brands like Top Shop, Procter and Gamble, Intel and eBay.

Greg Siegel, Senior Vice President at Legendary Digital Media, which is partnering with StyleHaul to produce the second season of Storytellers, describes Graceffa as a YouTube megastar with huge crossover appeal. Whether or not Graceffa manages to establish himself with a wider audience, there is no question that ‘crossover’ is one part of what RTL Group can achieve with its MCN initiatives and the work of Golden Moustache. The company is bridging the sometimes exaggerated but growing divide between youth and traditional media and also bridging ‘digital’ and ‘television’ for advertising partners.

RTL Group’s digital strategy is proving a success. Digital revenues account for 8% of the group total. In the first nine months of this year its catch-up TV services (including the long-established RTL Now), websites and multi-channel networks attracted over 71 billion online video views, up 193% year-on-year. FremantleMedia’s 230+ YouTube channels attracted 9.6 billion views, up 159% over the previous year. The group is predicting a full-year digital figure of 90 billion views.

None of this distracts from the ongoing importance of linear television and in their half-year statement, Anke Schäferkordt and Guillaume de Posch, the co-CEOs of RTL Group, made it clear that the future relies on a combination of broadcast and digital.

“In the digital age of total choice, the fundamentals of our business have never been more promising: Linear TV dominates the video market and is the only medium consistently reaching mass audiences day by day. In total, people watch more video content than ever before – long-form and short-form, linear and non-linear, on the TV screen and on multiple devices.” 

RTL Group is one of the best examples anywhere of a ‘traditional’ broadcast and production group pursuing digital transformation. This now means more than making content available online and on different screens; it means taking a share in the video subculture that has flourished on YouTube, where young stars have connected in a very personal way with their equally young audiences and achieved strong loyalty across various content niches – driven most famously by gaming (like people watching someone play Minecraft for two hours at a time) and make-up (watching accessible ‘girl next door’ YouTube stars do their make-overs and give beauty tips).

An RTL Group spokesman says the MCN marketplace feels like commercial TV in Europe during the 1980s: there is a pioneering spirit and people are being ‘flashy’ and ‘cheeky’ in order to get noticed. We are in stage one of the MCN expansion, where everyone is focused on building audiences and reach. Stage two – the monetisation of those audiences – will follow later, the company believes. As a result, content production expertise rather than sales expertise is the most important value-add that a broadcast company like RTL Group brings to the MCN market today.  

There is an opportunity to use smaller studios when creating the content for the MCN generation. It has to look good but production costs are much lower and a key benefit to a ‘traditional’ content owner is that they can afford to address niche audiences that could never be targeted with their own programming on television. “You can reach everyone, with almost every topic”, an RTL Group spokesman says. “You would not be able to show people playing Minecraft while they talk about the game on mainstream TV.”

RTL Group says it is focused on ‘video’ now, rather than just ‘television’ and there is a constant stream of digital innovations from the company. In October Mediengruppe RTL Deutschland launched Jubadoo, a new video platform offering tutorial video clips. This is an attempt to professionalise a type of content that has proved popular on YouTube, with advertising support. The service launched with around 50 videos and will be expanded each month. The initial focus is on interior design, DIY, food and drink, fashion, beauty and technology.

Also in October, Mediengruppe RTL Deutschland unveiled RTL Next, an effort to combine the most noteworthy stories from Info Network, its production company making news and magazine programmes, with viral issues circulating the web. The focus is on moving pictures, the marketing motto is ‘Topics that move the world’ (‘Themen, die bewegen’) and the service is designed for all devices. RTL Next spurns traditional news categorization and instead segments content according to the tags ‘Watch’, ‘Excitement’, ‘Concern’, ‘Laugh’ and ‘Get it’. 

RTL Group admits that it is harder to monetize digital content than linear television but programmatic technologies like those provided by SpotX (previously known as SpotXchange) will help to maximize yield from online video. The company is convinced that linear TV will remain the dominant way to watch television for some time, anyway, despite the growing influence of ‘digital’ services and despite its own digital initiatives.

Recent figures from IHS back this confidence. In a study of TV viewing times across the US, UK, France, Germany, Italy and Spain, the research and analyst firm found that Germans watched the same amount of broadcast TV in 2014 as they did the year before (210 minutes on average every day). Pay TV subscriptions in Germany grew by 700,000 in 2014, continuing its seven year growth trend, confirming that consumers still value video that is packaged and presented in what we might call traditional ways.

The IHS study, published in September, shows that broadcast TV viewing in France during 2014 was down 10 minutes per day (average) at 216 minutes but is still well above the 2010 average. Italians increased their average daily consumption of broadcast TV in 2014. “Following a steep fall in 2007, traditional TV viewing grew by an average of four minutes and 42 seconds per-person per-day between 2008 and 2014 to reach four hours and 20 minutes,” IHS reported. The company does note that high unemployment is one of the drivers for the Italian figures.

In Spain, the average viewing time for broadcast TV is 242 minutes – a slight drop from 2013. To put this in context, online viewing in Spain accounts for eight minutes per person, per day. In France, what IHS calls non-traditional viewing time reached 21 minutes per day, per person (compared to the 216 minutes of broadcast TV). 

An RTL Group spokesman emphasises that multiscreen viewing has not cannibalized linear television and is instead proving additive. The company is therefore looking forward to the day when non-measured digital views are all counted. 

As with all major commercial broadcasters, a decision to give ‘digital’ equality, in terms of emphasis and planning, is not based on the current value it delivers but represents a long-term play. In the short-term this is about positioning: RTL Group is giving consumers greater choice and flexibility for traditional long-form content (RTL Now), is immersing itself in a growing youth video culture (via its MCN investments) and is ensuring that no consumer is out of reach of their video-based advertising. The company is clear that linear TV will remain vibrant and provide the means for big brand campaigns to reach millions of people with the same message quickly, and that this process can then be complemented by digital advertising. 

Hear more from RTL Group

On Wednesday (December 2), Rhys Noelke, Senior Vice president Strategy at RTL Group, will be speaking during the opening session of Future TV Advertising Forum, joining senior buyers from OMD, Unilever and Starcom Mediavest Group to discuss the future of TV advertising. You can read more about that conference session here.

Later the same day, Henry Rivero, Senior Executive Digital Technology & Special Projects for RTL Group will be discussing the next steps in programmatic TV together with executives from Havas Media, ITV, Starcom MediaVest Group, Modern Times Group and Channel 4.

RTL Group is the host sponsor for the London event. 

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