From Pirate Signal to Prime Time RTL Group is perhaps the clearest case of private broadcasting not just surviving, but thriving in Germany. One must bear in mind that commercial TV is still a relatively young phenomenon here in Germany (and many other parts of Europe). RTL launched in 1984, beaming in as a quasi-pirate terrestrial signal from Luxembourg into only 200.000 German living rooms across the border. At that time, there was no European playbook on how to run a commercial TV station. So, the RTL team looked for inspiration and learning and ended up borrowing heavily from the US model. They did so for decades and unapologetically so. One of the oft-repeated stories (or urban myths) is about Hans Mahr, then RTL’s Program Director, flying to New York twice a year just to sit in an airport hotel and binge-watch US channels. Mind you that in those days, we did not have the internet and no-one would think of streaming. US TV was happening on another planet. Unsurprisingly, RTL’s programming leaned heavily American. To German critics, it felt cheap and shallow. To German audiences, it felt fresh and addictive. RTL shot to the top, always vying with public broadcasters like ARD and ZDF for dominance. A Grown-Up with Intentions Today, RTL is no longer the teenager emulating its idols. It’s grown up and more so: it may now become a role model itself. The planned acquisition of Sky DACH is not only a bold expansion but an obvious and big mark in the largest European TV market. It stakes a claim that says to the world that RTL wants to be the entertainment gateway for German-speaking Europe and a one-stop content universe. This deal makes so much strategic sense, you wonder why it didn’t happen sooner. Likely, Comcast clung to Sky too long and now offloads it at a base price of €150 million. RTL gets a bargain, and more so as the final price tag could rise to €577 million depending on RTL’s stock performance. Still, given Sky Germany’s €2 billion in annual subscription revenue, the math speaks volumes. It is rumored that Sky’s subscriber acquisition cost was almost reaching 2 years worth of annual subscription revenue per sub. Hence, for RTL bagging in the 5.1M subs from Sky at this price is a more than excellent deal. That also explains the delicious irony of this acquisition: RTL, once the apprentice watching Comcast from afar, now buys one of its crown jewels in Europe. Sky was a costly misfire for Comcast, never turned around and now sold off to the very player who once looked up to them. Bertelsmann’s Billion-Euro Bet To better understand the larger theme behind RTL’s move, we must understand the strategic perspectives from its parent company, Bertelsmann. The large European media house with its €19 billion revenue and 75,000 employees has committed €8 billion under its “Boost+” initiative to fuel acquisitions and growth through 2026. RTL is a core pillar, alongside Penguin Random House and BMG. Which suggests one thing: Sky is likely not the final stop. They created the engine room for a European push with this merger. Why Sky fills every major hole in RTL’s offering matrix Strategically, RTL gets what it always chased: premium sports, starting with the Bundesliga. For years, it settled for niche plays like NFL or turning a dull sport like ski jumping into an appointment viewing must-see event for Germans. Now, it owns Germany’s sporting heart. It also gets something it’s long lacked: a robust subscription base. While it has grown its own streaming service RTL+ successfully lately to around 6.0M subs, it still lags Netflix (16 million subs) and Prime Video (15 million). With Sky, RTL adds 5.1 million stable, higher-income subscribers: a goldmine in aging markets like Germany. And that’s another piece of the puzzle: aging audiences. RTL has tried to woo the 35+ segment (yes, in their language “older viewers”) into streaming and back to linear TV. The royally financed comeback of TV entertainer Stefan Raab is part of that strategy. Yet it seems to be a gamble with mixed odds. Germans aren’t exactly sentimental about comeback stories. But the signal is clear: RTL is targeting the demographic with money, loyalty, and time. Ad sales which are RTL’s traditional revenue bedrock are volatile. Subscriptions now add an anchor to stabilize the revenue streams. So far, RTL´s total annual revenue is a bit north of 6B EUR and advertising revenue has been constantly a bit more than 50% of that- with limited growth (rather the contrary). The creation of AdAlliance, aiming to make RTL a pan-European ad powerhouse, shows how seriously they take diversification on all fronts. The Hero’s Story starts here For the real big picture, we have to zoom out one level further. What RTL is building with Sky is more than just a broadcasters’ streaming offer. It is a base to build the German-speaking world’s Super App. RTL+ plus Sky’s premium content, plus magazines from Gruner + Jahr, plus digital services from Arvato are all well-oiled and established parts to build this engine. The goal is beyond just competing with public broadcasters or private peers. They are eying to position themselves into pole on the Big Screen and become the one platform to rule the German living room. What we witness is the ultimate coming of age story and we see now an RTL that has grown up. It’s also about Bertelsmann showing it can shape a uniquely European counterweight to Big Tech’s dominance. Strategic, confident, rooted in local understanding. A home-grown alternative to Netflix, Amazon, Meta. We should wish and hope that the Cartel Office sees this clearly for what it is: not consolidation for its own sake, but a shot at European sovereignty in entertainment. RTL now in its prime of development can become the European hero that we have all been waiting for. To borrow a line from RTL’s rebel years: Wir zeigen’s Ihnen. (We’ll show you.) |
