By Sahil Patel
Earlier this month, European media giant RTL Group launched the RTL Digital Hub, a new division inside the company dedicated to overseeing and growing its online-video investments.
The division is led by Marcel Reichart, who also serves as EVP of digital development and partnerships at RTL’s parent Bertelsmann. As EVP of the RTL Digital Hub, Reichart is responsible for a US- and Europe-based team tasked with assisting current online-video portfolio companies such as BroadbandTV, StyleHaul, Divimove, and SpotXchange, as well as unearthing new opportunities for RTL in the field.
Two weeks into the new gig, we spoke with Reichart about the Hub, its launch, and what he and his team hope to accomplish with it.
What was the biggest impetus behind creating the RTL Digital Hub?
Online video is at the heart of RTL Group’s digital strategy: First of all, RTL Group extends its premium linear TV content into the non-linear world. A second goal in online video is to assume a leading role in development, production, and distribution of content on digital platforms as the Group already does in the mainstream television world. Therefore, RTL Group aims for a strong short-form video presence via its own platforms and its multi-channel networks.
On the other hand, we strive to monetize online video assets and to participate in the high-growth programmatic video market. In this way, our investments are highly complementary: In only three years, via its MCN investments in BroadbandTV and StyleHaul, RTL Group has become the number two player by reach in the YouTube ecosystem, and SpotXchange a global leader in programmatic video.
Within this context, the RTL Digital Hub is the platform to bundle, support, and leverage our global online video businesses for the next phase of expansion. To do this, it has a dedicated resource team and a highly flexible organization. At the same time, we will ensure the operational leadership of their businesses by the CEOs of our key investments — a cornerstone of RTL Group’s de-central and entrepreneurial DNA. Don’t forget, RTL Group pioneered commercial broadcasting in Europe and created the number one player in Europe out of this, as well as a globally leading TV group including FremantleMedia.
I am looking forward to working with the impressive CEOs and founders and the strong team at the RTL Digital Hub. Our goal is that digital video, combined with potential additional investments, will reach such scale that it will become a significant growth driver and third pillar of RTL Group.
The Digital Hub team will be based in both Europe and the United States, with you overseeing both. How will that break down? Will the teams be focused on different things?
Undoubtedly the North American market is key in digital because of its innovative scale — and that’s where BroadbandTV, StyleHaul, and SpotXchange have their primary businesses. Nonetheless, online video is a global market, creating the opportunity to operate in the US, Europe, and Asia. The setup of the RTL Digital Hub reflects this and we will help to foster
external partnerships as well as synergies with RTL Group’s broadcasters and its global production arm, FremantleMedia, and with other divisions of Bertelsmann. We want to create a competitive advantage for our companies, talent, and partners. We need to be on both sides of the Atlantic to achieve these goals. There will be two teams: one for the MCN business and one for programmatic video advertising.
As the Hub aims to expand RTL Group’s digital portfolio internationally, where specifically do you see these expansions heading? Why are those areas so important?
You need to look at this from two perspectives. On one hand, the RTL Digital Hub significantly strengthens RTL Group’s position in North America, the biggest and most innovative media market worldwide. On the other hand, we will foster expansion opportunities through RTL Group and Bertelsmann networks where it makes sense and will also expand geographically. SpotXchange has already partnered with RTL Nederland, and StyleHaul has offices in the UK and Singapore. Recently, BroadbandTV acquired YoBoHo, which is based in India, but a global leader in kids’ entertainment on YouTube.
Where do you see future investments in online video going to?
As you can see from the impressive growth of video views over the past years, the companies bundled in the Hub show very strong organic growth, as well as technology, content, marketing-solution, and talent capabilities. Numerous high-profile content owners, brands, agencies, platforms, and top talent work with them already. This means that investments and acquisitions are optional. Even so, investments are a way to expand into new markets and build up capabilities and attract top talent. We are in constant and close dialogue with the CEOs and their teams to discuss opportunities. This helps us to execute in various ways. YoBoHo as an acquisition by BroadbandTV is a perfect example.
Together, we look at the market development and at the needs of our creators, customers, and partners, for example, in the areas of expanding our multi-platform and mobile platform capabilities. We won’t speculate about M&A activity with any company, in any market. If viable investment opportunities arise and if they meet our strict investment criteria, RTL Group
will have the means to pursue them. We have a multi-year investment strategy as well as the resources and allocation to expand the Hub.
We are also looking into strategic partnerships with third-parties and are ready to invest in these. Only one day after we announced the RTL Digital Hub, BroadbandTV announced their new pioneering partnership with the Huffington Post: Outspeak, the first next-generation online video journalism network, allowing journalists and creators to tell their stories on both platforms, and a gateway to connect to millennials.
What are some of the key things to think about in creating a diverse online-video investment portfolio?
We are at an early stage in the development of the online video market. The ecosystem is still evolving and highly dynamic. Naturally there is no blueprint, but this is a perfect fit for RTL Group with its DNA of pioneering. RTL Group decided to back first-class entrepreneurs, allows de-centralized leadership, and takes a long-term view. Now that we have achieved a critical mass, we will assess and develop more synergies and collaborations throughout the Group. Ultimately, it is about establishing new, successful business models and building market leadership.