“this is your success story”

week 37

15 September 2011

“This is your success story”Everything you need to know about the RTL Group Management Congress 2011

United StatesThe X Factor debuts extendedpreview

LuxembourgRTL Lëtzebuerg presents new season programming

the RTL Group intranetweek 37

Cover: Gerhard Zeiler at the RTL Group Management Congress 2011

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After a get-together at the new premises of Mediengruppe RTL Deutschland, RTL Group CEO Gerhard Zeiler and CFO Elmar Heggen opened the Management Congress with a detailed overview of the current state of the company. Adressing the congress, Gerhard Zeiler said: “RTL Group is in a very good shape – operationally, strategically and financially. The incredible development of the past years is your success, this impressive story is your success story.” Elmar Heggen added, showing the growing revenue and EBITA figures of the past years: “We are still a growing company – and not all media companies can say that. With a 13 per cent EBITA compound growth rate we belong to the best-earning media companies outside the United States.”

Bert Habets, CEO of RTL Nederland, took the stage and opened the session It’s About Programming! with emotional pictures from all of RTL Group’s operations, taking the participants to the heart of the TV business: Programming. In a first presentation, Thomas Valentin, Deputy Chairman of the Management Board of Groupe M6 in charge of programmes, talked about programming guidelines. He highlighted that “there are only a few rules in television, but some of these are essential”: building a family of channels, a clear and reliable schedule, a strong access prime time line-up, thematic blocks throughout the evening and surprising the viewers with special events. He said: “Big hits come with big risks.” Matthias Scholten, Content Director at RTL Nederland, presented his views on how to strengthen a brand and engage the

“We are still a growing company”More than 250 top executives from all around RTL Group gathered in Cologne for the RTL Group Management Congress. On the first day, they intensively exchanged thoughts and views on programming, advertising sales, radio and diversification. On the second day they took a first glance into the future of TV.Luxembourg - 15 September 2011

Gerhard Zeiler and Elmar Heggen (right) at the RTL Group Management Congress 2011


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audience by extending programmes prior and after broadcast for example with concerts – or what he called ‘the total experience’. Frank Hoffmann, Managing Director of the German channel Vox, presented how the channel developed from a loss-making operation in the 1990s to a strong member of Mediengruppe RTL Deutschland through a clearly defined brand profile and cooperation within the German family of channels.

In the second thematic session It’s about sales!, hosted by Anke Schäferkordt, CEO of Mediengruppe RTL Deutschland, the delegates discussed the challenges TV companies face on the advertising markets. Many new players enter the market with the aim to revolutionise TV advertising. Anke Schäferkordt said: “We know for a fact that the evolution of the advertising market is something we will go along with. We will be there and shape it.” Martin Krapf, Managing Director of IP Deutschland, then presented his strategy how advertising sales houses can be a driving force in this evolution. First, free-to-air broadcasters must protect their core business by keeping ad prices high. On the other hand Krapf sees a need for more research on TV advertising impact and called on the participants: “We have to present the results in a simple and comprehensive way, so that our clients understand that the environment in which an ad is placed makes a huge difference.” Finally, investments in the growing online market are key to keep pace with the ongoing development on the advertising market.

With an informative film about radio, Philippe Delusinne, CEO of RTL Belgium, opened his session Radio Rocks! He highlighted the advantages of radio and how this medium perfectly complements TV – in terms of content as well as in terms of sales. “Radio is sunshine every day,” Delusinne concluded.

According to Nicolas de Tavernost, who hosted the session TV & More, the ongoing process of digitisation has been a catalyst for a new wave of fragmentation. There are more and more channels, platforms and screens. At the same time, programming costs are growing faster than advertising revenues. “The classic mission of TV channels – selecting programmes, broadcasting them and selling advertising – needs to be adapted to these new developments,” he said. Valéry Gerfaud, Managing Director of M6 Web, and Marc Schröder, Managing Director of RTL Interactive, presented examples of different diversification activities and products – phone-in

competitions, branded payment cards and even wine selections – and explained the underlying strategies. Christian Bombrun, Deputy Managing Director of M6 Web, and Arno Otto, Director Digital Media at RTL Nederland, explained their views on digital strategies for free-to-air broadcasters and how non-linear offers such as RTLXL or M6 Replay complement classic linear television.

The second day of the RTL Group Management Congress began early in the morning, at 8:30, by shedding light on three major topics under the heading ‘The Future’: current growth projects, a discussion about the future of television, and RTL Group’s strategy. Gerhard Zeiler welcomed participants to the New Horizons session, during which Andreas Rudas, Executive Vice President Regional Operations & Business Development Central and Eastern Europe, gave a presentation on the new joint venture with Reliance in India and on further expansion plans in Asia. Then Tony Cohen, CEO of FremantleMedia, spoke about growth opportunities at FremantleMedia. He emphasised that although FremantleMedia is mainly known for big “blockbuster hits” such as Got Talent, X Factor and Idol, it has much more to offer: increased investment in series, sponsorship, online projects, games on social networks, and licensing. He said: “We will develop from a TV production and content company into what I call a 21st century entertainment company.” Sander Schwartz, Head of Children’s and Family Entertainment at FremantleMedia Enterprises, and Alex Thabet, CEO of Ludia, went on to present specific projects as examples for what this growth might look in the sectors of children’s entertainment and gaming.

Thomas Valentin, Vice Chairman of the Executive Committee, Head of Networks & Contents, M6


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Dawn Airey, President of CLT-Ufa UK TV, led the External Views session. Chris Anderson, Editor-In-Chief of Wired magazine and author of the books The Long Tail and Free, and Tess Alps, CEO of the British marketing organisation Thinkbox, presented their views on the future of television. First, Alps spoke about increasing media convergence. She described this convergence as a sandwich: two pieces of bread – devices and distribution technology – and the filling: content. “It is content that defines what our customers are doing,” said Alps. She also presented a Thinkbox survey of ten families who received the latest technical equipment: internet TV, tablets, or the possibility of using catch-up TV services. The survey identified five trends. First, content is still king. Second, there is a hierarchy of different devices: the bigger the screen, the more people like to use it. Third, two devices are often used simultaneously for chatting, playing games or shopping online while watching TV. Fourth: linear TV is still dominant; and fifth: viewers want to interact with ads.

Chris Anderson then spoke about the “Long Tail” approach and how this might apply to the television industry. The monopoly of the big shows that used to “empty the streets” is over, he said, not least because viewers now have many more choices than they had ten or 20 years ago. He said the task of today’s businesses is to win the customers’ time, and illustrated this using the example of “freemium” models where customers can initially use a game for free, but had to pay later for other functions or new levels. “People who convert pay the most, stay the longest and are loyal,” said Anderson. He pointed out that this model is very effective with digital technologies in particular, because the additional services can be provided at almost no additional cost. Finally, he left the audience with some food for thought about his five “laws” of new media economics: First, there is a Long Tail, but only the monopoly of the blockbuster is dead. He explained that there are still some blockbusters, but additionally several niche markets opened up which are competing for consumers. Second, there is also a Long Tail of time and space. “The long tail is not some kind of obscure content, but any form of consumption of the programme schedule, content on different devices, or time-shifted TV viewing,” said Anderson. Third, freemium is the best way to combine old and new business models. Fourth, digital costs are trending to zero – if a project is to be enhanced with additional content it is feasible at almost no cost. And last but not least, nowadays media companies compete with everything about consumer’s time. “And this cannot be underestimated,” Anderson said.

In the last session of the RTL Group Congress, Gerhard Zeiler explained the future strategy of the company, its challenges and opportunities, followed by questions and answers with the top executives. Then, the congress ended with an emotional film of programme highlights from all profit centres – a showcase of RTL Group’s success stories.

Martin Krapf, Managing Director of IP Deutschland

Valéry Gerfaud, Managing Director of M6 Web


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The stage of the RTL Group Management Congress Frank Hoffmann

Gary Carter with Tony Cohen (right)

Dawn Airey

Elmar Heggen (left) with Ingbert Vöcker

Gerhard Zeiler

Impressions from the Management Congress


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“Huge possibilities for TV”Anke Schäferkordt on sales.Luxembourg - 15 September 2011

Are we seeing a revolution in the TV ad landscape?Well one thing is for sure: there are many competitors out there, trying to gnaw away pieces of the advertising pie. Viewing habits are slightly shifting and advanced ad technologies offer new possibilities to our clients. But what a recent study illustrates is that these changes will take the shape of evolution rather than overnight revolution. At least that is what they learned from distributors, advertisers and broadcasters in the US. Fortunately this matches our view and the view of most of our European clients. TV will remain key for brand advertisers for many years to come. No other medium can reach so many viewers so fast – and emotionalise products as thoroughly. But we mustn’t be complacent. We have to constantly improve our offer. That’s what we wanted to show in our session.

What would you describe as the main challenges for TV ad sales houses in 2011?We shouldn’t make the mistake of looking at our business short-term. We would do better to take a long-term view for the next three to five years. The TV business is facing a couple of challenges: TV advertising markets are not growing substantially anymore. Prices are always under pressure due to inter- and intra-media competition. Various new competitors are bringing “online marketing models” into the market, like auctioning or targeting. On the other

hand there are huge possibilities for TV as our content is seen by many more viewers on many more screens. And after all, the combination of TV advertising and online advertising is the most efficient media mix which can be offered to our advertising clients. And we are the ones to offer it.

How do you think the TV advertising sales business has to adapt to meet these challenges?First of all we have to defend our core busi-ness by preserving the value of TV advertising, because it will continue to remain our most important source of income. We have to keep price levels high, we have to keep pushing research on impact and effectiveness and talk about the results, to demonstrate that the environment in which ads are placed makes a huge difference. And secondly, we have to realise growth in the online and mobile segment by enhancing our portfolios, protecting price levels and keeping control of our content and our inventory.

Anke Schäferkordt, CEO of Mediengruppe RTL Deutschland, where the RTL Group Management Congress took place


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In times of ongoing digitisation and fragmen-tation, what kind of programming does it take to be a popular broadcaster?As Thomas Valentin pointed out in his presenta-tion, there are five key essentials that pave the road to successful business. But it’s not enough to talk only about programming at this point – it starts much earlier: viewers love brands because they know what they can expect from the brands they know. So you have to create a family of channels with strong brands that complement each other. The next step is to create a strong schedule: clear and reliable. For example, create thematic blocks throughout the evening and focus on serial formats to benefit from viewers loyalty. Then, establish outstanding programmes. This is possible in all genres, take for example the big event shows like X Factor and Idols, or reality formats like Un Dîner Presque Parfait or The Farmer Wants A Wife. These programmes are also well-known brands and role models within their genre. Afterwards you can link programme brands with channel brands, so that viewers have a clear idea that this programme belongs to your channel. And make the most of the RTL Group family: share information on flops and tops, exchange trends and discuss ideas. Last not least and perhaps the most important rule: be passionate about your product. TV is all about emotions.

How can a smaller channel benefit from this strategy?Take the example of Vox in Germany. Frank Hoffmann and his team brought this strategy to excellence. Germany is one of the most competitive TV advertising markets in the world. Naturally, smaller channels like Vox cannot afford large programming budgets and marketing campaigns as bigger channels might. But if you look closely at your programming and your strategy, you can compensate for this. In Germany, Vox and RTL Television work in close cooperation and complement each other. If you have a clear, reliable programming line-up, you can stand out with your shows. That’s what Frank Hoffman called “Programming Lighthouses”. And as a matter of fact, you don’t always need the latest productions. There are series that need to age – like the CSI franchise for example – and there are classic movies that attract a big audience with each broadcast, but their rights are cheaper. With this strategy, Vox managed to keep the cost structure level while simultane-ously increasing audience share and profits.

How can you get the most benefit from a programme?With today’s opportunities of the internet and digital media, you can exploit big events like X Factor at 360 degrees – or as we at

“Be passionate about your product”Bert Habets on new trends of programming.Luxembourg - 15 September 2011

Bert Habets, CEO of RTL Nederland


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RTL Nederland call it: create a ‘total experi-ence’ and thus engage the audience. Prior to the broadcast on TV you can tease people with short clips to make them curious about the show. During the broadcast period and the live shows you complement the viewer’s experience by fully exploiting the means that social networks offer. You can get in direct dialogue with your audience and in the long tail you can prolong the effect of the show to a whole year. That’s what we did with the X Factor for example, when we organised the X Factor Experience in June, a special concert where fans could directly get in

touch with the X Factor candidates they know from TV. Additionally, we invite advertisers to connect to our brand – that’s what we did with Pepsi and X Factor. In a creative approach, they form part of the show, from the promotion campaign to the website and in the long tail to concerts and merchandising activities. For The Voice Of Holland we are already starting up our activities for the next season. Recently, we launched a new website featuring tons of videos. Last but not least, the ‘total experience’ approach is strengthening the brand significantly.

Radio makes around six per cent of RTL Group’s revenues. Looking at this small number, the question arises: Does it make sense that radio is part of RTL Group?In accordance with Gerhard Zeiler, I say “yes”. And I will also tell you why: Yes, it may not represent much revenue, but it does generate great returns on sales. The radio business is a healthy and very stable business. Besides, radio advertising generates instant sales. Apart from that, it complements TV perfectly, not only in terms of advertising market, but also in terms of media consumption. Radio is strong in the morning, while TV is strong in the evening. Radio is often listened to out of home, for example in the car, while you’d probably enjoy watching TV mostly at home. At the same time, radio is a young medium, reaching millions of young people every day, opening the door to the youth market.

And what makes radio relevant for the audience?Radio is very relevant politically. Take RTL Radio in France for example: All important politicians regularly give an interview to an RTL Radio journalist or speak live on the air to deliver their messages. Additionally, the station offers practical advice with special shows or devoting the programme of a whole day to a special topic. At RTL Belgium, we offer an initiative called SOS Emploi, where we try to help unemployed listeners to find a job, and help companies to find the right employees. This proves not only that radio is relevant, radio is also credible.

Besides, new technologies and new platforms are no threat for radio – they are opportunities to bring radio even closer to our audience. With apps for all kinds of mobile devices for exam-ple, listeners have their favourite radio station always at hand. You don’t even need a special, unwieldy device like you did in the past: it’s in your mobile phone – something most people always carry with them. With these apps we are close to our listeners wherever they go. And let’s not forget that interactivity has always been a part of radio’s DNA, be it for raffles or listeners calling in to wish for a special song.This is why radio is relevant and prove to is that listening duration is already at high levels and even increasing.

How would you characterise radio in just a few words?Let me use some words that my colleagues used to describe radio in the film I showed at the RTL Group Management Congress: Radio is credible, interactive, diverse, non-exclusive, modern, confident, powerful, emotional – and after all it has a great future ahead. To sum it up: Radio is sunshine everyday.

Philippe Delusinne

“Sunshine every day”Philippe Delusinne on the medium radio.Luxembourg - 15 September 2011


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“A positive effect”Nicolas de Tavernost on diversification.Luxembourg - 15 September 2011

Nicolas de Tavernost

Groupe M6 in France is one of the role models for diversification activities within RTL Group. What are the key learnings from these projects?All of our brand diversifications have been part of the same strategic scheme: leveraging and maximising our asset’s utilisation. The first strategic rationale is to optimise our usage of advertising inventory and maintain prices. As unsold advertising spots on TV cannot be stored, it is preferable to use them to support new internal activities. Also, through diversifica-tion we can exploit the channel’s brands and marketing for secondary markets.

Groupe M6 has been pursuing this strategy for quite a while and our experience has resulted in three key learnings. One, before putting a diversification activity on the air – or in an ad – you must always compare the two and see what’s best: traditional content including advertising, or new activities like a shopping window or call-in TV. The second lesson concerns the integration of these activities: depending on the level of capital expenditure required, and the feasibility of the project, you need to assess whether the activity should be internalised or kept external. This is what we did with M6 Mobile by Orange for which we partnered with the mobile provider Orange. The third and final lesson is that one must remember that TV advertising alone does not create a market. If a market lacks dynamics you have no dynamics in a market, TV ads won’t create any. That is why we select diversification activities that have their own intrinsic potential which can be enhanced with TV advertising.

How can RTL Group companies benefit from new distribution channels?You have to bear in mind that media consumption differs considerably depending on the size of the screen and whether the programming is linear or non-linear. On a mobile screen, you will probably prefer to watch your favourite shows alone, maybe while commuting. On a wide screen at home, you might enjoy a football match with some of your friends. And most likely you will prefer to watch a football match live. This means the effect of new distribution channels on traditional media consumption is not only limited, but in some cases even positive – due to its complementary character. And from our perspective, new digital distribution offers are new sources of revenues.

Online advertising is booming, and there are multiple pay models for video-on-demand. But to make sure this system remains favourable for free-to-air TV channels, we need to pay attention to several points. We have to secure more and more rights: free-to-air television, linear streaming on devices, catch-up services or VOD. We also have to secure the business model, by avoiding ad skipping for example. And eventually, we have to be aware that we are not alone. With global companies like Google, studios like Disney, telcos like Deutsche Telekom and so on, many new players are entering the market. These players may enter into partnership with each other or with other players such as free-to-air TV channels. We have the ability to lead and shape these alliances if we cooperate. That’s why it is necessary to exchange ideas and best practices across RTL Group in our Synergies Committees.


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How can free-to-air channels counter the development of increasing competition?The on-going process of digitisation has been a catalyst for a new wave of fragmentation. New free-to-air channels have appeared, new distribution platforms have emerged such as IPTV or connected TV, and customers have more and more screens and new consumption habits. At the same time, programming costs are growing faster than advertising revenues. The classic mission of TV channels – selecting programmes, broadcasting them and selling advertising – needs to be adapted to these new developments. First of all, in our core markets

it is key to keep on investing in programmes to maintain market share. And to strengthen this effort, we need to expand along the value chain towards production, with the aim of fostering in-house creativity, strengthening local programmes and being the innovation leader for secondary exploitation. As for new digital distribution usages, we need to make sure that our content is distributed anytime, anywhere – not only on free-to-air, but also on all kinds of digital platforms. And last but not least, as well as our core business we need to promote new services and products, with a view to finding new sources of revenues and leveraging our assets.

FremantleMedia is mainly known for its big shows, serial drama and fiction events. How are you going to maintain momentum and secure growth?We do not rely on our flagship formats alone. FremantleMedia is one of the biggest produc-tion networks worldwide. And besides our big hits, FremantleMedia also has a global exper-tise in other parts of the value chain, such as sponsoring and licensing. To grow in the future we will have even more big production hits, for example with new shows like Take Me Out, Total Blackout or My Name Is… We also look for new costumers, platforms and business models. We will develop from a TV production and content company into what I call a ‘21st Century Entertainment Company’. What that means can be explained with two examples:

in less than two years we developed FremantleMedia Enterprises’ Children’s and Family Entertainment Division from paper plan to being a significant player on the market. And with Ludia we acquired a significant player on the gaming market.

What is your strategy for FME’s Children’s Division?The overall objective is to establish our Children’s Division as the world’s leading independent provider of quality content for kids and family across all media. The new division aims to own the intellectual property rights to specific brands, while the production is outsourced to top quality partners. Therefore, we are always looking for fresh, exciting and compelling content. Having secured that,

Tony Cohen

“A 21st Century Entertainment company”Tony Cohen on future growth at FremantleMedia.Luxembourg - 15 September 2011


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we will start creative partnerships with top children’s content producers and build a pipeline of new properties. Additionally we aim for strong relationships with key broadcasters. In the long tail, it is important to understand how the brands connect with consumers and how we can turn it into toys. A full exploitation of a brand would lead to gaming, live shows, sponsorship, online, telephony, mobile and home entertain-ment offers besides format sales, tape sales and consumer products.

Why did you invest in gaming?The gaming sector is a growth market – especially if you look at mobile and social games. Both genres are estimated to grow by 24 per cent and 32 per cent respectively until 2014 – outpacing other video game sectors. In 2010, the social gaming market was already worth $2.4 billion. In connection with

FremantleMedia, Ludia can profit from our strong brands and develop games based on franchises like The Price Is Right for all platforms as well as creating their own shows, using the freemium payment model. Besides being a growing market, social gaming has another big advantage: in the past a producer was dependent on manufacturers and distributors, while in social gaming, we do not need any manufacturer anymore and can do our own marketing. Thus, the value chain is shorter and around three thirds of it can be controlled by us. At the moment, Ludia’s portfolio consists of the games for the classic console, mobile and social networks. Ludia and its ad partner Wild Tangent have successfully implemented several product placement integrations across multiple platforms, so that we create revenues even if the game itself is free for the users.

The sandwich of convergenceTess Alps, CEO of Thinkbox, on future trends in TV consumptionLuxembourg - 15 September 2011

Tess Alps

How will TV look like in the future?In total, we see four technological trends. The first trend is about the enhancement of TV viewing. Often, we don’t pay enough attention to it, but when you talk to real people they say: “Watching in HD on my beautiful big 54 inch TV is amazing – like going to the cinema”. The improvement in the quality of what we’re watching through HD and increasingly 3D makes TV a more exciting experience at home – well not quite at cinematic levels, but getting close. The second trend is about all devices

becoming TV devices, as TV can be delivered to any device. The third trend is about the TV set itself having an internet connection and thus bringing internet functionality, but obviously potentially internet behaviour to the main TV set in the living room. So delivering TV on-demand, interacting with TV, bringing web apps like social networking onto the TV set. Although that’s going to be possible, we’re slightly doubtful about how much people will do that. The fourth trend is the ability of all those devices to talk to each other. You can


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control your TV set from your I-Pad – either in the same room or at your office.

How would you describe the famous buzzword of media convergence?We believe that convergence is best described as a sandwich, because there are genuinely three component parts – three layers that work together. These three layers of the sandwich are: distribution technology – be it satellite, terrestrial broadcasting, broadband or even DVD – which is the first layer of bread. The other layer of bread is the device that you watch on and then obviously the filling, the exciting bit, is the TV content itself.

The layers don’t conflict with each other, but they are interchangeable. You can watch television via broadband on a tablet – you’re still watching TV. You’re no less watching TV, just because the internet is delivering it. And of course that gives television more options and opportunities.

Recently, you created a scenario in which you “tellyported” families to the TV world of the future with converged devices and new features. What were the key findings of this study?To look at the future we picked ten families. For two months they lived with a big 3D TV set – an interconnected TV set, so that they could get apps. There was a Facebook, Youtube app, Lovefilm and Netflix app – all of the main content apps you could probably have on your I-Phone. We gave them a fetchbox, which enables you to watch all the catch-up services like the BBC I-Player, 4OD and the ITV Player – on your main big TV set. Then we gave them a mobile device, an I-Pod Touch, which could control these devices.

After two months we went back and asked what they thought of them and what had changed in their behaviour. Some things had changed, but what was amazing is that live TV remained absolutely dominant in their lives. What they loved the most was watching catch-up TV where it belongs – on the TV set. The only app that moved to the TV set was Youtube – you could say that Youtube is a form of TV. Some things did not move. They didn’t want to do social networks, because they did not understand why they should do private things on a big public TV set. They got a second device, so why wouldn’t they use that?

Something else we found was that the multiple screens were actually being used in people’s homes – and that it is a massive opportunity for TV. People always wanted to talk about TV. Now, they can chat about TV when they watch it. They can play along and want to play along with TV. On a second screen you can create some sort of play along device. In the UK there’s a show called Million Pound Drop where you can play along live, online and take part in the show effec-tively at home. Social Networking is amazing and broadcasters have really embraced it – it’s free marketing, it helps to promote and recommend shows. My advice is: Let’s use social networks, but don’t let social networks use us. I know lots of people in the TV industry who think that their job is to make people to talk about TV on Twitter, as opposed to make people watch it. Actually, it’s a byproduct and if you can use that: fine. But don’t create shows just to get chat. That’s all. Don’t let social networking go to your head.


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“You have got to win your audience every day.”Chris Anderson, Editor-in-chief of Wired Magazine and author of The Long Tail, on adapting The Long Tail strategy to the television business.Luxembourg - 15 September 2011

Chris Anderson

What would be your approach to counter the ongoing fragmentation?For the television market, everything looks like a television channel. So I understand that a solution to fragmentation is more television channels. Other people’s solutions to fragmentation could be releasing content that’s not designed for broadcasting in the first place, release content that’s not actually video itself. That is what we see with games and social experiences, brand extensions if you have a brand – and that does not necessarily have to be television – that could also be live events or licensing.

All of us in the media basically had a monopoly in the 20th century and it was easy to count your competitors on one hand. Now we have an infinite number of competitors – including industries that aren’t even our own because you are competing for time. So: How do you com-pete with fragmentation? You compete on your merits. You have to win those audiences; you don’t get them for free anymore, because you have a monopoly. You have to go there and assess them. Eventually, nothing new: Great content, great marketing, great engagement, word-of-mouth. You have got to win your audience every day.

You differentiate between a ‘head and tail” strategy. What does this mean? And how does it apply in the TV world?For that, you have to keep in mind the three dimensions. First, the content. Second, time and the third is the platform. The classic head is blockbuster content, seen in real time over broadcast. Now, there are two more tails of content: First, non-blockbuster content which typically fails the test and gets taken off television. But now you can have it live on digital distribution just at the same limits. The other

tail is blockbuster content at other times – seen maybe years later and in different formats and on different devices.

I think, what you need is a tail strategy for content: Don’t just have blockbusters, don’t kill your non-blockbusters but give the non-blockbusters a distribution platform which can allow them to find an audience or at least give them another chance to find an audience. And then start cheap content that starts in the tail and might become popular and become head. That’s one side of the tail strategy. The other side is: ensure that content can live on different platforms at different times. So you can tap that long tail distributed to that.

You advocate the “freemium” model. How could this be transferred to the TV industry?Traditionally there have been two different worlds: free-to-air channels and pay-TV chan-nels. Now, freemium has the capacity to merge the two. It has the capacity to make free content available that’s both marketing and advertising supported and establishes choosing the biggest audiences with a small range of engagement. Then, the key is – and this is only possible in digital distribution – the key is to say: Do you want more? Here’s the deal: You have to pay.

You need to segment your offerings into at least two groups: the free offerings and the paid offer-ings – and the paid offerings have to be better: Either more content, better content or a better experience – let’s say you take the ads off or offer high definition. There are many ways to slice that. That requires a little bit of thought, but when you do that, you have the capacity of both worlds – the advertising market in the free space and the subscription in the paid space. And the consumers decide on which one they feel most comfortable on.


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Ten outstanding entrepreneurs received the Bertelsmann Award for Outstanding Entrepreneurial Achievements in fiscal 2010 – and fully half of them come from the ranks of RTL Group. Anke Schäferkordt, Frank Hoffmann, Nicolas de Tavernost, Bert Habets and Philippe Delusinne received the award – most of them not for the first time. Bertelsmann CEO Hartmut Ostrowski presented the Entrepreneur Awards during his speech at the RTL Group Management Congress dinner, completing the presentation of the awards for the 2010 fiscal year. Ostrowski has already honored Thomas Lindner and Torsten-Jörn Klein (Gruner + Jahr), Joerg Pfuhl (Random House) as well as Ludovic Lempire and Dominque Decaestecker (Arvato) for their outstanding contributions to the success of Bertelsmann last year.

Before turning to the individual winners from RTL Group on Monday evening Ostrowski addressed a word to their CEO, Gerhard Zeiler, whom he described as the “father of RTL Group’s success” and also as a “mentor of many Bertelsmann Award winners,” adding: “Over the years, you have developed and encouraged many entrepreneurial talents. For this, I sincerely thank you.” Ostrowski said it was a great pleasure to work with an entrepreneur on the Bertelsmann Executive Board and to be able draw on his expertise and creativity.

Together with Günther Grüger, Ostrowski then presented the first Entrepreneur Award 2010 to a record winner: Anke Schäferkordt received the award for the sixth time since it was first introduced in 2003. No other entrepreneur at Bertelsmann – male or female – has won the award as often as the head of Mediengruppe RTL Deutschland. She has met the same strict criteria for winning the prize six times: an operating EBIT of at least €30 million, and above previous year; revenues above the previous year’s; a positive Bertelsmann Value Added (BVA), which must also reflect a year-on-year improvement; and finally a return on sales that is among the best in the respective industry. Not only that – in order to win the prize again, you must have increased your operating EBIT and BVA since your previous award.

This is precisely what Schäferkordt, who last won the Bertelsmann Award for fiscal 2008, has managed to do. As he presented the award,

Hartmut Ostrowski presents five Entrepreneur Awards 2010 to RTL GroupAnke Schäferkordt, Frank Hoffmann, Nicolas de Tavernost, Bert Habets and Philippe Delusinne win coveted awards.Germany - 14 September 2011

Hartmut Ostrowski

Günther Grüger, Frank Hoffmann, Nicolas de Tavernost, Anke Schäferkordt, Philippe Delusinne, Bert Habets

and Hartmut Ostrowski (from left to right)


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Ostrowski praised her “great talent for the right programming,” declaring that she knows the television business inside and out. But beyond Mediengruppe RTL Deutschland’s strong financials, which led to the awarding of the prize, he said Schäferkordt had simultaneously managed a tour de force that would have been worthy of winning the prize by itself – merging the media group from four different physical locations into one complex, where it now benefits from a shared infrastructure.

The second prizewinner’s channel is also housed under this shared roof on the banks of the Rhine: Frank Hoffmann, Managing Director of Vox, not only succeeded Schäferkordt in his job – he is also following in her footsteps by winning his fourth Bertelsmann Award. Hoffmann was appointed Managing Director of Vox in 2005. “Since then he has continued the channel’s success story,” said Ostrowski, highlighting Vox’s steadily increasing market share, audience size, revenues and results.

Ostrowski described the next winner, Nicolas de Tavernost, as an “innovation leader.” Right from the start Ostrowski said the M6 boss had managed to turn a small TV channel into a diversified media company that “has long been playing in the Champions League” in terms of the company’s creativity, diversity and profitability. “Groupe M6’s success story is also Nicolas de Tavernost’s success story,” said Bertelsmann CEO, presenting Tavernost with his third Bertelsmann Award to date.

A brilliant performance in 2010 also completed Philippe Delusinne’s hattrick of Entrepreneur Awards. The head of RTL Belgium has done it again, said Ostrowski, by achieving outstanding results with his group of channels in the relatively small market of French-speaking Belgium, and for making RTL Belgium the almost unassailable number one in the market. As Ostrowski presented Delusinne with his third Bertelsmann Entrepreneur Award, he highlighted another of the manager’s equally great achievements: “Philippe and his team also break records when it comes to helping people.” Ostrowski pointed out that the Télévie telethon initiated by RTL Belgium raises more than €7 million in donations for cancer research in Belgium every year.

Finally, Bert Habets, CEO of RTL Nederland, celebrated his first Bertelsmann Entrepreneur Award. Ostrowski called his success remarkable as well, given that the current market growth in the Dutch television market is all down to RTL Nederland. “Our Dutch family of channels is achieving record ratings – and our winner and his team have managed to turn these ratings straight into advertising revenue,” said Ostrowski.

After paying tribute to the winners’ outstanding entrepreneurial achievements, Ostrowski directed his thanks once more to the teams behind the five. “The success of all of your businesses, the success of RTL Group and the success of Bertelsmann are a team effort,” he said.

Frank Hoffmann, Nicolas de Tavernost, Philippe Delusinne, Bert Habets and Anke Schäferkordt (from left to right)


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The 8-minute preview featured never-before-seen footage, including an exclusive first look at the auditions from Los Angeles and Seattle, as well as an inside look at the drama, raw emotion and behind-the-scenes action of The X Factor.

Hosted by Steve Jones, The X Factor will make its highly anticipated debut in the US with a two-night series premiere event on Wednesday 21 September (20:00 ET/PT) and Thursday 22 September (20:00 ET/PT) on Fox. Judges Simon Cowell, Paula Abdul, L.A. Reid and Nicole Scherzinger will begin their search for undiscovered talent 12 years old and over – both solo artists and vocal groups – who are worthy of the largest prize in television history: a $5 million recording contract with Syco/Sony Music.

For more up-to-the-minute news, videos and information, please see TheXFactorusa.com. The X Factor is also present on Facebook and Twitter. The X Factor is produced bySyco Television and FremantleMedia North America. Rob Wade and Siobhan Greene are Executive Producers for Syco Television. Cecile Frot-Coutaz, Richard Holloway and Andrew Llinares serve as Executive Producers for Fremantle-Media North America.

The X Factor debuts extended preview on FoxAn all-new extended preview of the US version of The X Factor made its debut this week, following the NFL on Fox late doubleheader match-ups on Fox. United States - 2 February 2011

Nicole Scherzinger, host Steve Jones, Simon Cowell, Paula Abdul and L.A. Reid

Watch the preview on

Backstage


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“A completely revisited programme schedule, first-rate collaborations, new shows, series in the Luxembourgish language, a re-vamped news show, new websites, new mobile applications and of course the news, all the news and nothing but the news, that’s what Luxembourg’s number one media family is offering in the upcoming season,” says RTL Lëtzebuerg CEO Alain Berwick.

Even though RTL Lëtzebuerg occupies the number one spot in Luxembourg, reaching 82.4 per cent of Luxembourgers daily, it is not content to rest on its laurels and intends to surpass itself in order to thrill its audience. The first step in this direction is the broadcast of the entire content of RTL Télé Lëtzebuerg in HD, thus adding even more pleasure to the viewers’ experience.

On the programming side, this fresh wind blowing over the number one television station in the Grand Duchy brings with it a more important place reserved for the news. Conscious of the demands of its viewers in this area, RTL Lëtzebuerg has decided to enrich its news services.

Every weekday evening, prime time opens at 19:00 with the all-new Magazin – De Reportage, a 10-minute investigative magazine show that

takes a look behind the scenes of events in the news. Following this is the television news programme De Journal, with a new format combining computer graphics and virtual elements, and featuring journalists and experts on the set, all designed to better inform and decipher current events for viewers.

Access prime time is theme-based. Monday to Friday, 20vir Spezial deals with a different theme, such as recreation, gastronomy or consumer advice. For each theme, RTL invites a host of experts and columnists from the channel to the table. On Saturday evening, in collaboration with Eldo.TV, Ben’s Club makes its on-air debut. Presented by a team of young hosts, the show is a 40-minute blend of unconventional interviews and surprising guests combined with audience interactivity.

RTL Télé Lëtzebuerg is making big news this season by bringing the famous Simpsons of Springfield to viewers in the Luxembourgish language every Sunday in access prime time. The other major event is the broadcast of the first Luxembourgish sitcom Weemseesdet, starting on 30 September.

In radio, RTL Radio Lëtzebuerg and Eldoradio bring their share of new features to listeners. On RTL Radio, the news will have a more prominent

Thrilling its audience Innovation, surprises, dynamism and variety are part of RTL Lëtzebuerg new programme schedule. Luxembourg - 12 September 2011

Alain Berwick


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place. The number one general-interest radio station in Luxembourg wishes to be the audience’s champion, and it is an audience that will no longer be targeted by time slot. In fact, the programmes are now designed for the general audience and the new season schedule will now feature a news broadcast every 30 minutes, thus noticeably reducing the waiting time between news broadcasts.

The 2010/11 season was marked by a major achievement for Eldoradio. Indeed, the number one music radio station with listeners under 35 has exceeded the 20 per cent mark in audience share for the first time and is reaching 100,000 listeners per day. Thus, since one does not change a winning team, the season to come will have a sense of continuity. What is new at Eldoradio is mainly found on Eldo.TV with a weekly programme on RTL Télé Lëtzebuerg, on the eldo.lu portal and in mobile services.

Created more than 15 years ago, the digital hub of RTL Lëtzebuerg continues to be the leader in web news in the Grand Duchy, with more than

75,000 visits on average per day. The key phrase for the RTL NewMedia team remains perpetual innovation. The team is constantly looking to surpass itself in order to respond to the latest digital consumption modes of the audience.

Thus, for the 2011/12 season, Internet and mobile users will find RTL.lu in a new format, presenting a more refined and elegant homepage as well as a news site that is exclusively in French, 5minutes.lu, mainly aimed at French residents as well as inhabitants on the border. Naturally, the content of these two sites is also available via the I-Phone, I-Pad and Android applications.

The Simpsons, now also aired in the Luxembourgish language

RTL5minutes.lu


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Number one on FacebookAccording to the complete ranking of the top 100 French brands on Facebook, Fun Radio, RTL Group’s music radio station in France, becomes the first radio station to pass the one million-member mark.France - 12 September 2011

Set to New Zealand timeFrom 9 September to 23 October 2011, RTL Radio brings World Cup Rugby to listeners, providing coverage of matches played by France’s national rugby team as well as reports, discussions and interviews.France - 9 September 2011

Excellent ratings with 12-hour documentaryOn 10 September, numerous viewers were interested in Vox’s 12-hour documentary special on the anniversary of the attacks on the World Trade Center in New York. Viewership peaked at 18.8 per cent of the 14- to 49-year-old audience.Germany - 12 September 2011

A second news showRTL Televizija launched a new news programmes in the afternoon. An average 19.5 per cent of Croatia’s TV viewers tuned in for the first few broadcasts.Croatia - 12 September 2011

America’s favourite personality returns to M6Since 9 September 2011, M6 broadcasts the new Season 8 of NCIS – a chance for the series’ many fans to join Agent Gibbs and his team for new investigations.France - 9 September 2011


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Reality-TV makes a strong showing on W9W9 counts on three entirely new and unique reality-TV shows this season to help it to remain the number 5 national channel. The wager has paid off with the first programmes, Les Ch’tis à Ibiza and La meilleure danse.France - 13 September 2011

11 September broadcasts draw high ratingsOn 11 September 2011, many television channels paid tribute to the victims of the New York and Washington attacks, which occurred exactly 10 years earlier. The special programming offered by RTL-TVI peaked at an audience share of 43 per cent.Belgium - 13 September 2011

Love is in the airBroadcast for 14 weeks in prime time on M6 , L’Amour est dans le pré which ended on 12 September 2011, thoroughly charmed the French proving that the summer of 2011 belonged undisputedly to M6: An average of 6.1 million viewers watched every episode.France - 14 September 2011

60 Secondes Chrono is off to a flying startLaunched on 5 September 2011, RTL-TVI’s new game show this season, 60 Secondes Chrono, is making a strong debut, with as many as 600,000 viewers watching for an audience share of 31.5 per cent.Belgium - 14 September 2011

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