As Super RTL turns 25, CEO Claude Schmit talks to TV Kids about the channel’s history and his ambitious plans for its future.
Super RTL has been the market leader in Germany’s ultra-competitive kids’ landscape for much of its history. Backed by RTL Group and The Walt Disney Company, the channel launched as Germany’s first commercial kids’ network in 1995 and by 1998 had become the country’s leading service for children. Claude Schmit has been with Super RTL since day one and has served as its CEO for two decades now, navigating the platform through a rapidly changing media ecosystem.
TV KIDS: It’s quite a milestone anniversary for Super RTL and for you this year! The channel is turning 25, and you’ve been at the helm of the company for 20 years?
SCHMIT: That’s correct, and it makes me the longest-serving CEO in German television.
TV KIDS: What has been the defining impact of Super RTL on the German media landscape?
SCHMIT: Without sounding too boastful, we made commercial children’s television socially accepted in Germany. When we first started, we had to compete with the public channel, which had a very attractive offer as it was and still is advertising-free. Our approach was to have a better program than our colleagues from the public channel and to be financed through advertising. We spent quite some time and put a lot of effort into persuading people, especially parents, that ad breaks are not necessarily the work of the devil! Now, 25 years later, private children’s television is accepted in Germany.
TV KIDS: What have been some of Super RTL’s most significant milestones?
SCHMIT: The good thing is that there was never a dull moment here. We always had different challenges to face. But I think we can divide the history of Super RTL into two parts, with the first one being pre-Disney and the second one post-Disney; Disney’s decision to launch their own free-TV channel in 2013 created the biggest impact so far on Super RTL in our long history. But there are other milestones—like the digital transformation that might have an even bigger impact long term considering that we are only at the very beginning of that change process. A couple of years ago, we realized that the world around us was changing, with the internet taking off and all the big streaming services coming into the market. It fundamentally changed the way we had to do business. I think those were the two most significant impacts on our business.
TV KIDS: How has the channel’s performance been over the last year?
SCHMIT: In terms of market share, we are still number one. We closed off last year with a 21.6 percent market share, which puts us ahead of our colleagues from the public channel—they had 17.7 percent. We have been the market leader since 1998, with one exception: when Disney launched in 2014. So we have a pretty long experience as the number one. Our prime time closed the year with 2.3 percent; that was one of the best prime-time shares we ever generated. In addition to the market share as one relevant figure, we nowadays have reach as another important benchmark that we need to consider. We are capable of constantly maintaining our overall market share, but we do lose reach in certain daytime slots. We lost about 7 percent ad block reach, which is not dramatic. With our prime-time program, we even gained about 7 percent. That also translates into another very important number: ad revenues. Despite our decreasing reach in daytime, we still had the highest daytime advertising revenues ever in the history of Super RTL. And we had the highest advertising revenues in prime time ever. This means we had the highest advertising revenues all together ever. That’s a very good starting point.
TV KIDS: What’s driven that success?
SCHMIT: I think it’s two-fold. Looking at the market shares I just mentioned, there are obviously two main players that are relevant for advertising customers: Disney Channel and Super RTL. Super RTL is the market leader and naturally gets the biggest part of the money in the advertising business.
The other part is that we offer a different approach to our advertising customers. That is something we are going to improve further in the future. We are a one-stop shop, meaning that we offer a combined reach where we add up all our different platforms, and we sell that package to our advertising customers. They don’t have to book their campaign through YouTube directly, for example, because they can get the same or even better reach just by stopping in one shop—us. And, we have a very strong internal business-relationship team, which has excellent insight into what our customers are planning on the marketing side. I hired Thorsten Braun recently as a key member of my management team as chief revenue officer to make sure that this one-stop-shop concept with our advertising customers makes even more sense in the future. Thorsten used to be CEO of the Disney television activities in Germany. He’s also responsible for our consumer-products business, which is growing dramatically as well. We had our best CP results ever in the history of the company. We have big plans. We are going to multiply our CP business at least by two over the next years. The CP business makes up about 10 percent of our TV advertising business. It’s mainly driven by PAW Patrol, which we have as an agency and a broadcaster. It’s a Nick property, and still, they prefer licensing it to us for exploitation on the linear business as well as on the merchandising side.
When we say we are aggregating the reach of all the platforms, YouTube is playing an extremely important role for us. You can sell YouTube inventory either via YouTube or by yourself. We want to sell it ourselves. We add it to the reach we generate over all our platforms. That business grew by more than 300 percent last year. We are benefiting from our huge reach in the YouTube sphere and the sales we generate with it.
TV KIDS: Are clients turning to trusted channel brands following the concerns about kids’ safety on YouTube?
SCHMIT: That is one of the reasons. Brand safety is one of our key sales arguments. With Super RTL and our brands TOGGO and Toggolino, our customers are 100 percent brand-safe. That is something YouTube cannot offer. But it’s more than that; it’s also reach. With Super RTL and all our platforms, we reach many more kids in Germany than YouTube does.
TV KIDS: In your consumer-products business, are you focusing mainly on third-party brands like PAW Patrol, or are you also looking to develop licensing programs around some of your in-house productions?
SCHMIT: We are trying to. We have a disadvantage compared to Disney because they are the owners of their own happiness, so to speak—they own the IP. For us, it’s different. We are a third-party agency and this is why we started developing our own properties as well. We have Woozle Goozle, which is a blue puppet. That is something we will focus on more in the future as well. But we are happy with what we call a near-IP strategy. IP would mean we are the 100 percent owner of the IP. But near IP is enough for us, because we are covering only the German market, so we have no interest in China, South America, North America, wherever. Other partners can join in and do the capitalization of those markets.
TV KIDS: You’ve been acquiring more from the open market since Disney pulled its content in 2013. What have been the major lessons for your content team since then?
SCHMIT: The first thing we learned is that you can live without Disney. When we lost the Disney programming, we lost about 33 percent of our supplied volume in daytime, which is huge. And we did not know whether we would be successful in sourcing that programming somewhere else. We found out that there are programs available in a quality absolutely comparable to the Walt Disney programs. The Walt Disney programs have one major deficit, though, as they are very expensive. We found comparable formats for less money, which I find is a good tradeoff! We learned to focus more on other partners. We also learned to not only focus on the big players in the market but also on smaller players where we can find exactly what we need with the set of rights that we need for our territories. We have our preferred partners and have established a good network in the industry supplying us with content. We evaluate everything produced for kids around the world, which also allowed us to diversify our sourcing business massively.
Also, we started developing and producing more and more in-house. We launched a weekly entertainment magazine show on Saturdays called TOGGO Show, which is an interesting case because it’s a format we tested in our digital businesses, and it worked so well that we decided to move it from digital to linear. Not everyone succeeds in doing that. And finally, in June we successfully launched our kids’ and family radio channel, TOGGO Radio.
TV KIDS: Tell us about your app investments.
SCHMIT: We are thrilled with the success of our Toggolino app, which is doing tremendously well. The app, targeting small kids starting at the age of 2, combines different content categories, which means it offers videos, games and audio to the user. We are trying to apply the success of the Toggolino app to our TOGGO app made for the older kids. We are going to integrate all of our digital businesses into one single TOGGO experience at the end of this year. I think the TOGGO app will then outperform the market as well.
TV KIDS: What are the plans for SVOD?
SCHMIT: Kividoo is doing OK. Again, we have huge plans. This summer we joined forces with TV Now, the SVOD platform of Mediengruppe RTL. We are already supplying a lot of their kids’ content. We have a very close cooperation with our shareholder RTL Group on the SVOD side and are now part of a much larger player than we could be as a stand-alone.
TV KIDS: How do data and analytics inform your programming and strategic decisions?
SCHMIT: Again, we are in an extremely good position. Obviously, the Googles of this world invented the data-analysis business. Fortunately for us, we have been and still are very strong in the old-fashioned type of research. We spend a lot of money every year on that. We are one of the leading platforms for research analysis in the children’s business in Germany. We have now, for the 20th year in a row, organized what we call Kinderwelten (Kinder World), where we present to the advertising industry the latest research on kids. We have a very solid research background. Adding to that background—which Google doesn’t have—are the insights we generate through our data analysts. That is more like an optimization process, where we optimize our products based on the results from our data analyses. The classical research is much more fundamental. By combining both forces, we can reach a knowledge level that no one else can.
TV KIDS: What are your other priorities for the year ahead?
SCHMIT: We have restructured our organization. We are now a content hub. Meaning we try to provide the best-possible kids’ content to our audience, anytime and anywhere. That is entirely different from linear television, so we had to adapt our business. We have three main pillars. One is content generation across all the platforms, which is run by Martin Gradl. Then we have Boris Bolz running all our platforms, including our linear business as well as YouTube. And we have Thorsten capitalizing on all that reach in an optimized fashion with our advertising customers. That transformation process from a traditional linear business into a content hub for kids is going to take some time. But we are well-positioned. I have rejuvenated my management team. That is the most important part: making sure we have the right people to be able to reach our strategic goals.
TV KIDS: How have you been serving your young audiences during the pandemic?
SCHMIT: The COVID-19 outbreak and the following lockdown changed quite a few things for us. Luckily, we were able to adapt to the new situation very fast in mid-March. Within days we made the necessary arrangements to have all employees work from home. We also changed our daytime programming as soon as possible into a special holiday schedule as a reaction to schools and kindergartens being closed during spring and summer. With nearly all children being at home, we fortunately experienced a 20 to 30 percent rise in daytime reach—that helped to cushion the loss in advertising revenues. We held on to our original plan to launch TOGGO Radio despite the pandemic. We also had to put up with declining advertising revenues, just like everyone else. As we were able to cut costs, we are now more or less back to our actual budget forecast. So luckily, we have not been hit hard by the coronavirus crisis.
TV KIDS: What do you enjoy most about running Super RTL?
SCHMIT: Coming to the office and hearing my colleagues laugh is the most thrilling moment of the day for me. It shows we have precisely the right type of cultural framework within which we can thrive on having the best content and being the best sellers and best platform provider. The more people I hear laughing, the better I feel. Naturally, I do also look at the numbers—they are a great source of joy as well every morning! But for me, it’s more important to see that my team loves their work; they love working here, they love coming to work every day. And honestly, we are quite proud of what we have achieved over the last 25 years. When we started 25 years ago, Super RTL was a piece of paper with a business plan with three items on it: revenue minus cost is result. That was the plan when we started! As a former Disney executive once said, “Super RTL was indeed one of the most profitable mistakes we ever made.”