Claude Schmit

March 19, 2012 World Screen Interviews

 


This interview originally appeared in the MIPCOM 2011 issue of TV Kids.

 

Super RTL is the most popular children’s channel in Germany. With two powerhouse shareholders, The Walt Disney Company and the RTL Group, Super RTL is able to tap into treasure troves of programming, which it uses to target different audience groups throughout the day. As CEO Claude Schmit explains, the linear channel has evolved into a cross-media brand in order to better serve today’s media-savvy children.

 
TV KIDS: How has Super RTL managed to maintain its market-leading position for so long?
SCHMIT: Our success is due to our ability to adapt our programming to our target group throughout the day. In the morning we go after the preschool audience, which is traditionally a very strong target for us. We get very high ratings in the morning; we are number one with some 30-percent market share. We are way ahead of KI.KA and way ahead of Nickelodeon. Our programming in the morning is softer in tone, slower in movement, less bright in color: typical preschool. In the afternoon, we really cater to the school-age audience, so we skew slightly older and we are strictly animation. We used to air repeats of live-action Disney shows from access prime time. We do not do that any longer. We now skew slightly younger and more for boys, and that is very successful. The third slot we have is access prime time. It is the most difficult one because here the competition is highest. But it is the most interesting one because TV usage is highest as well. In this time slot we have two main competitors. One is KI.KA, which offers programming for the very, very young, who watch with their parents before going to bed. So KI.KA serves the preschool audience, while Nickelodeon skews older. We have to navigate carefully between KI.KA and Nickelodeon and we have been doing that for 15 years mainly with Disney programs. During the last four or five years, we have broadcast the fantastic Disney Channel live-action series. Hannah Montana, The Suite Life of Zack & Cody, Wizards of Waverly Place—you name it, we have it. These are the main reasons for our success in daytime.
In prime time, although we are not a kids’ channel, it is very important for us to offer programs that are watched by parents but are suitable for children as well. We have to be number one in the ratings among kids as well, which we are, although we do not offer children’s programming, but family programming. [Our ability to] cater to the target audience that is watching at a given time of day is the reason why we have been successful.
 
TV KIDS: In the last few years, you have been transforming Super RTL from a linear channel to a cross-media brand. Why has this been important?
SCHMIT: It is important for two reasons. The first one is, running a TV channel is very expensive. We became market leader in 1998 and we were very proud of that. Unfortunately, we were still losing tons of money in those days, and that is not a very good condition to be in, especially if you consider the reaction of your shareholders! So we created our cross-media strategy, which helped us generate more money and transform Super RTL into a very profitable business. We had to develop more sources of revenue to make the company profitable.
 
The other reason is that we believed that TV alone is not the model of the future—I think everybody agrees with that. The difference is that we were already pioneering this idea 10 to 15 years ago, and in those days we were really the first ones because everybody else was saying, “Yes, cross media might be the sum between Internet and TV,” and we said, “No, it’s much more than simply that.” It’s really covering all media, 360 degrees. We always say we are not a typical TV operator, we are more like a marketing company and we have to be present wherever our target group is. We also discovered that our customers—the advertisers—were looking for ways to get their marketing messages across. And they didn’t care if they used the Internet, pigeons or other animals! They were just considering how they could get their message across properly and they really loved our cross-media approach.
 
TV KIDS: And children today are using multiple media.
SCHMIT: We see that especially with the Internet. If you consider, for example, the 10-to-13 age group, their Internet usage is equal to their TV usage. That is something that is going to translate downward to younger children in coming years, and we have to take that into account. So if you want to address the older children you cannot do it with TV alone.
 
TV KIDS: You have also done considerable work on your websites in providing them with content. You have catch-up TV on your websites as well?
SCHMIT: Yes, we have. We have almost ten different websites. It’s a mixture of advertising-supported websites and subscription websites because we believe that is an interesting business model. We have our main platform, TOGGO.de, which is the largest [portal] of children’s entertainment content in the German market. We have upgraded it with video, because that is very important to our target group. We have more than 40 series running on our Internet video player, with more than 400 episodes. We launched our own gaming platform, called Zaga.de, a year ago, where we have 3,000 games, and not only for children. We have an online platform only for girls that is running smoothly. We have our clubs, Toggolino Club and TOGGO-CleverClub, which are subscription-based.
 
We acquired Scoyo a year ago, which is an online learning platform, and it’s doing fantastic. So online is definitely a growing business. I’m not 100-percent satisfied with the online revenues we generated even though everyone said the advertising money is going to flow from TV into the Internet. We see tremendous growth rates in the Internet advertising business, but it’s in no way comparable to what we do in television, so the big money transfer has not taken place yet. And I don’t think it’s going to be equal to TV in any way, but the financial numbers should increase.
 
TV KIDS: How is advertising for the children’s market?
SCHMIT: We are seeing growth. We closed the first half of the year with an increase of about 5 percent in our kid ad revenues, and that is higher than the general TV advertising market, which does not mean that the children’s TV advertising market is outgrowing the general market, it means our sales are outgrowing the market, so we have to pay tribute to our sales teams. On the other hand, we know that about 80 percent of the TV advertising market in Germany flows through our books, and that number is not likely to double! [Laughs] It’s not even likely to increase tremendously, so what we have here is a very classic fight against the other commercial broadcaster, which is Nick. The market is growing, but it’s nothing to write home about. We have to make sure that our colleagues from Nickelodeon get as small a piece of the pie as possible.
 
TV KIDS: You mentioned the subscription websites. Are you looking for ways to diversify your revenues?
SCHMIT: Absolutely, and we are in a very good position now because we started more than ten years ago, and about 25 percent to 30 percent of our net revenues are generated outside of classical television. There are very few TV companies in Europe that can show a similar figure.
 
TV KIDS: Not long ago, in Europe, there was the idea that only public broadcasters would serve the needs of children. And yet, Super RTL does quite a lot of pro-social campaigns and quite a bit to serve the needs of children, even though it is a commercial broadcaster.
SCHMIT: Yes, that was when public broadcasters only had a few hours of children’s programming on Saturday and Sunday morning and so did the private stations. There were no dedicated children’s channels either on the commercial side or on the public side. But our colleagues from public service are slightly arrogant. They think they have invented the [concept of doing] good, which unfortunately for them is not really true. We are a full-fledged children’s channel, and there are some people who say, “Television for children is not a good thing, they should go outside and play.” It’s a very laudable idea but it is not very realistic. Then we have another faction that says if children are to watch television, they should at least watch advertising-free television, which I can understand, especially for younger children, but again that’s not what makes the world tick. If you see the numbers, Super RTL is number one in its target group and it is not a public channel, so obviously that equation doesn’t work. We have been the market leader right from the very beginning. And over the last 15 years there has been no indication whatsoever that we have taken advantage of our market leadership. It should be noted that 50 percent of the programs we run on Super RTL could run on the public channel KI.KA. From a content point of view, there is not a substantive difference. The difference is in the advertising, but that is our business model, so that is why we have to be even more socially oriented than any other channel, including the public channel, because we have that image deficit to fight.
 

We have developed our own shows, like Pepp & Pepper, where we try to teach our preschoolers to participate in sports on a regular basis, to eat properly, etcetera. We have launched a campaign (Media Smart), which is not typical for Super RTL, because through it we provide schools with educational materials to show the youngest children how to deal with advertising, how to deal with media, how to deal with the Internet, and this is supposed to be included in schools’ curriculum. That is not something that Super RTL was intended for, but we do it because it’s important. We are also very aware of the risks of the Internet for children. Here, together with companies like Google, Microsoft, Deutsche Telekom, and the federal government, we have launched an initiative (fragFINN) that checks the safety of a list of websites for children. We have a team of educators in Berlin who check some 4,000 websites on a regular basis and greenlight them so that children can surf in a safe environment. We are also very active in rebuilding German kindergartens, some of which unfortunately are in a very dire state and in need of repair.