Keynote: Super RTL’s Claude Schmit

Super RTL CEO Claude Schmit told TV Kids Festival participants about how the broadcaster is staying at the forefront of the German market during his keynote conversation with Anna Carugati at the virtual event today.

The company marked its milestone 25th anniversary in 2020. “We were the first private, commercial TV broadcaster [for kids] in Germany. It was a difficult time. When we started, we had to beg for distribution among the various authorities catering to the cable capacity in Germany.” While the early days were challenging, convincing the market that commercial television for kids was a viable offering, Super RTL emerged as a market leader by the late ’90s and has remained in that position–“but for one year—the year after Disney Channel moved from pay TV to free TV.”

That success is rooted in Schmit and his team realizing a few years ago that the environment was changing fast: “We were moving away from being the local hero in linear television. We had to adapt to the new streaming business, etc. We started quite a while ago, and that was the most important step in our development.”

On how Super RTL’s positioning has evolved, Schmit noted, “We have succeeded in moving from a purely linear channel to a content hub. We have to make sure we offer content pieces, which have to be the best possible, to our viewers, the kids and their parents, on whatever device they are on at whatever time they are using it. We were the first to build up a subscription internet business 15 years ago. And I remember clearly when we came up with the idea, we went to our shareholders and they said, No way this is going to work! [Laughs]”

Today, Super RTL caters to its viewers with linear channels, the apps TOGGO and Toggolino, HbbTV, a streaming service, a YouTube presence and a radio station. It also has its own L&M business. “We offer the largest portfolio possible.”

Carugati asked Schmit how Super RTL’s acquisitions strategy has evolved since co-owner Disney pulled its content in 2013 in advance of launching its own branded service. “Disney supplied about 33 percent of our daytime grid, so basically overnight, we had to replace quite a large chunk of our programming. Fortunately, our scouts were out there looking for suitable material. It was difficult because Disney programming is very high quality, but we found it. We found it with DreamWorks; we concluded an output deal with them for the German territories.”

That deal, which came before Netflix signed its own global agreement with the studio, gave Super RTL access to a “relatively large and qualitatively well-positioned product library and new productions.”

The Super RTL team also took a cherry-picking approach to finding great content. “We succeeded in dispersing our acquisitions further away from one big player to a larger variety of big and small players.”

Schmit went on to stress that Super RTL presents a range of benefits to content owners. “We are the channel in Germany that offers the largest reach. We are selling eyeballs. We are able to offer interesting prices to our suppliers. In addition, we are not only a broadcaster, streamer, distributor; we are also a merchandising agency. So we get behind the merchandising business on behalf of the initial licensor. That’s one of our main additional buying arguments: We do not only pay you a license fee but also would like to act as your merchandising agent in the German-speaking territories.”

On the approach to originals, Schmit quipped, “It’s a love/hate relationship! As a broadcaster, a content man, I love original productions, no question. Unfortunately, as the CEO, I’m a bit more skeptical. As you well know, the numbers are quite different. As soon as you engage in in-house productions, the tab tends to be a bit higher than if we just acquire the products from somewhere else. And our programming people always have fantastic ideas. Normally the discussions go well, until the moment when they have to give me the numbers—meaning the cost! Then suddenly the temperature changes! [Laughs] I’m not running a worldwide organization like Netflix or Amazon, so I cannot pay a million per episode for children’s programming. So why don’t you come back with something more realistic? We do in-house productions; we try to be very local with magazine shows. It’s not like an animated series where you have to have three or four years in development and then you produce it. That is much more complicated.”

Super RTL’s key originals include Woozle Goozle and Super Toy Club. It also teamed with TVNOW—Mediengruppe RTL’s VOD platform—for Ninja Warrior Germany Kids, which has been a huge success, Schmit said. “That was the first time we engaged in a large-scale, very expensive, high-quality live production, and we are now looking into if we should continue with a second season. It was very successful, but again the price tag was not really cheap.”

Carugati then asked Schmit about the decision to launch a radio station for Super RTL. It was first mulled a decade ago; at the time, he and his team said, “Radio is so different from what we do in our other businesses, and we have no in-house competence for radio, so let’s do something else.”

In recent years, though, Super RTL hired some staffers who had experience working in the kids’ radio business. Plus, a restructure at RTL Group brought the business closer to the long-running and robust radio segment at Mediengruppe RTL Deutschland. “Suddenly, we had contacts with very competent radio people inside the group. The CEO of the radio group, Stephan Schmitter, came to see me and said, we have to do this. We know how to do radio, you have a very strong brand with TOGGO, which can be used extremely well in radio, and there is no relevant major player in the radio business in Germany. So why not join forces and do it? And I said, let’s go for it!”

It’s still early days, and while Schmit said that his own ambitious targets for the service were not reached, “our advertising customers loved the idea of being able to add radio reach to our large portfolio.” The lineup on TOGGO Radio includes a daily news show, the ratings for which “are going through the roof,” Schmit said.

The conversation then moved to the ad market and Super RTL’s offer to clients, which Schmit described as a “one-stop-shop. We offer reach not only on our linear channels but also our digital business, on YouTube, on radio, merchandising, live events, outdoor, etc. No one else can offer this to the market. That is one of the reasons we are so successful and why we did indeed succeed in minimizing the downturn in ad revenue last year due to the coronavirus. We did generate less than we anticipated, but it was reasonable and we were able to compensate all the losses with cost reductions. So we’re mainly on budget, which for 2020 is tremendous news.”

Being a one-stop-shop means Super RTL engages with its clients directly—“there are no intermediaries, no agencies. You have to talk to the marketing people or the CEO directly, which is what we do. We are in direct contact on a daily basis. We’re discussing their marketing programs with them, even prior to having them transform their marketing logic into a media logic. And then we can talk to them: What is your marketing plan? How can we help you? Which of our platforms suits your needs better? We have developed that business over the years and it’s working very smoothly. That makes us different from all the other players.”

On serving audiences amid the pandemic, Schmit said, “The reach increased during the pandemic; children were watching much more television than they used to before. They used quite a lot of streaming services as well. So we did not lose any reach in 2020, whereas in 2019, we did lose some reach. We saw an increase in reach in the first month of the pandemic, which was tremendous. We benefited from that. Now it’s coming back to a normal type of behavior. We did not change our programming structure dramatically. We adapted it a little bit. Children were at home. They were supposed to—and I’m sure they did—do their schooling at home, but they had more time to watch television. So we said it might be useful to move more into our holiday programming. But we maintained our schedule as it was; no big changes.”

As for COVID-19’s impact on Super RTL’s merchandising business, Schmit said, “It grew! We did not expect that. As you can imagine, in a crisis like that, the parents might have to save money on some accounts, but their children are always the last to suffer, so to speak. Looking at the numbers, the general market for kids’ toys grew in Germany over the last year. We benefited from that because we are a very strong player in the merchandising business. We had a very good merchandising year. We are going to increase that business. Wwe had two investment plans for our shareholders: one was radio, the other was we wanted to enlarge our merchandising business by enlarging the portfolio of products we offer. We are not focusing only on video-related themes, but we are moving into things which might not have a video application in the first place.”

M6 Group’s acquisition of Gulli, among other services, in France, also presents an opportunity for Super RTL, Schmit said. “Gulli is a bit like the equivalent of Super RTL in the French market. M6 belongs to the RTL Group, as we do. So we decided to talk to them and see if we can do things together. Can we produce together? Can we buy together? Can we do the merchandising business together?”

The two companies have identified a project for which they will take a combined merchandising approach for the French and German markets. “Maybe we will even add our colleagues from Holland. We are moving away from a single Germany-only territorial approach to more of a Europeanized approach. I think that presents huge potential for the future as well.”

Post-pandemic, whenever that arrives, priorities include returning to pre-pandemic revenue levels. “That’s not going to be the case in 2021; that would be overly optimistic. We plan to increase our revenues and be on pre-corona levels in 2022. From there on, we are going to grow. We’ll see how our streaming service is doing. We have joined forces with TVNOW; we are cooperating with them on the kids’ business. There’s a lot of potential there. Merchandising will be important in the future as well. We’ll have more live activities, which we stopped in the pandemic, obviously. So we will redevelop and reinforce the live offer to the market.”