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29 August 2019

RTL forms formidable ad tech team, needs to drop “total video” jargon

Luxembourg-based media firm RTL Group underwent a long-awaited face lift this week involving an injection of new executive blood, based on the aspiration of “shaping the future of the European total video industry,” as proclaimed by CEO Thomas Rabe.

Back in March, Faultline Online Reporter highlighted RTL’s advertising technology arsenal as one of Europe’s most promising trends, after a rapturous performance in the full year results of parent company Bertelsmann, and we think RTL thinks it finally has something resembling a definitive strategy etched out.

First things first though, “total video” reflects an ill-judged idea at major European broadcasters that despite the diversity of the continent as a whole, that their homegrown successes are enough to merit belated onslaughts against established SVoD players. Netflix made in-roads through high budget, binge-able US dramas – positions then cemented through investments in local-language content and partnerships with local studios. RTL’s idea of a video revolution is forming a new group management committee.

But, of course, we have heard this term “total video” before, when RTL acquired server side ad insertion vendor Yospace for $33 million back in January. Total video is simply a flashy name for RTL’s AdConnect advertising sales house, and we wish RTL would stop using the phrase before it catches on. AdConnect comprises 3 products; RTL AdPremium which offers access to RTL’s family of VoD services; RTL AdEx which includes ad inventory sold via SpotX and Smartclip; and RTL AdAffinity which provides access to videos around influencers on multi-platform networks.

Central to the new strategy is a major advertising technology overhaul. It has taken RTL years to put together a team worthy of overseeing its ad tech clout, which includes the acquisitions of US ad-serving platform SpotX and programmatic ad sales platform Smartclip in recent years, prior to purchasing Yospace, which in turn came after terminating its ad tech contract with barely-breathing video software vendor Ooyala.

RTL’s next few steps in forming a European powerhouse of an advertising software stack look ominous for SpotX. RTL is putting its RTL Deutschland division in charge of all advanced advertising technology across Europe, bundled under the Smartclip brand, with the exception of the UK. It says SpotX and Smartclip will continue to deliver technology to European clients, but for Smartclip, RTL has much bigger plans – suggesting SpotX will be merged into Smartclip and the brand eventually phased out.

RTL plans to build an open ad-tech development unit based around Smartclip, tailored for the needs of European broadcasters and streaming services. Meanwhile, RTL says global partnerships for SpotX are being “reviewed” in the wake of SpotX’s February 2019 acquisition of server-side ad insertion vendor YoSpace.

RTL’s digital transformation has involved recently relaunching the OTT video service Now Plus in Germany and France, as well as rolling out on-demand offering 6Play with French media firm M6 Group (which RTL owns). RTL now owns and operates 8 VoD platforms in total and is attempting to align these offerings to push them throughout Europe. Canal+ is on a similar path, trying to relaunch its now shuttered CanalPlay service, and US majors are beginning to coalesce around similar SVoD services.

Former RTL CFO Elmar Heggen has been switched to COO, handling all international operations, while RTL poached EVP of corporate controlling and strategy, Björn Bauer, from parent company Bertelsmann as its new CFO. They will join executives from its three biggest businesses which will comprise this new management committee.

Media firms and broadcasters across Europe could learn a lot from RTL. The company’s subscriber footprint is prospering, to the tune of a 46.2% gain in Q2 to 1.2 million fully paid subs, boosting revenue 4.6% for the first six months of 2019 to €3.2 billion.