RTL GROUP
TV stands for Total Video
Deutsche Bank London, 8 September 2016 Guillaume de Posch Highlights Record interim operating results
+3.2% € 2,878 million € 1.0087% Revenue CashInterim conversion dividend rate 20.219.4% +8.6% EBITA Margin € 580 million € 341million Reported EBITA Net profit
2
Agenda
1 STRATEGY Introduction to Total Video Content
FINANCIALS Ad Tech
INVESTMENTS
APPENDIX
3 Overview ‘Total Video’ describes the dynamic expanding TV universe
TV as we know it … … evolving to Total TV … … as an integrated eco-system
Non-linear Linear Linear Linear
Content Ad tech Data
Now non-linear offers grow in quantity TV landscape has been fragmenting Digital tech, data and new types of and quality, moving closer to generation by generation content are embedded in Total TV traditional TV as TV-like offers
4 TV universe Linear TV universe has expanded for generations and this will continue …
4th Fragmentation expected to 8bn 3.5bn Pay TV 3rd FTA Families
Adv. accelerate programmes Long form form Long 2nd
TV
1st GenerationTV … targeting more niche
audiences or business models
Niche Channels 600m (e.g. News / Music) Adv.
… via new distribution platforms
Short form form Short programmes
Higher programme investment Lower programme investment
Est. Market Size (GER/F/NL) Definitions: Long-form is > 30 minutes, Short-form is < 30 minutes, Lower invest is defined as content x in € produced <50K per hour. Higher invest is defined as content produced for >50k.
5 Source: Market sizes are internal estimations from a combination of internal business unit estimations and research sources TV universe … expanding from linear to non-linear – illustrated in four ‘Quadrants’
Audiences expect…
Families of
SVOD / More choice channels pay online …viewing as catch- More video experience better up offer personalized than “just” linear
Long form Long viewing TV Less advertising, Pay TV FTA better experience
LinearTV Non-linear Advertisers expect…
Higher ROI (driven by Niche Digital first Channels … digital efficiencies) YouTube video / standards to rise (Aggre- Fully transparent Niche to TV level, but gation) reporting Content pricing to remain
Short form Short Innovative cross- low platform or cross- market campaigns Higher invest Lower invest Linear TV Non-linear
6 Viewing time ‘Total Video’ is currently not fully measured
Total video viewing time Minutes per user per day / estimated
Online short-form Germany France USA Online long-form (SVOD/Catch-up TV) Time-shifted (DVR) 328m Online long-form Linear TV 249m 11 232m “Leakage” can +16min 25 only be +10min 9 estimated – TV Linear Time- +5min 6 measurement 10 TV shifted systems only 3 29 slowly catching up 13 6
264 Online short-form +3min 210 -4min -5min 224
Vs. 2012 2015 Vs. 2012 2015 Vs. 2012 2015
7 Source: IHS May 2016, user defined as internet user between 18-64 evenly balanced by demographic, age, gender and income Our strategic priorities across the 4 quadrants Follow the viewers and explore presence in all video segments…
Our ambition for … audience
4 1
Explore Continue to Capture growth in total potential expand family of video, regain younger
SVOD channels and audiences, prevent Long form Long offerings catch-up TV / OTT unmeasured viewing offers
… advertisers 3 2
Expand our Invest in digital presence in Offer wider scope of first content and MCNs advertising products in brands globally and Short form Short ‘Total Video’ monetize
Higher invest Lower invest
8 Strategic priorities …while investing in key success factors: exclusive content, ad-tech and data
Unique content remains essentialCapture in agrowth ‘Total Video’ in total video,universe regain Invest in content 5 business younger audience, Long form Long prevent unmeasured viewing Digital technology will be key Build out ad-tech 6 enabler
Offer wider scope of advertising Ability to unlock data is going to Extend data skills 7 products in whole Short form Short be key video universe
Higher invest Lower invest
9
Agenda
1 TV Broadcast Family 1 STRATEGY 2 MCN
3 Originals FINANCIALS 4 Content
5 Ad tech INVESTMENTS
APPENDIX
10 1 Broadcast family Expansion of RTL broadcast family – linear and non-linear
1
Continue to Investing in our family of 4th expand channels remains top-priority broadcasting family – 3rd especially in non-linear Catch-up is now an integral part of our family – and is 2nd treated as its own brand
TV 1st Generation Continue to optimize channel portfolio & launch new channels
Linear Non-linear
11 2 MCNs Short-form business expanding beyond YouTube
TV 2 1st Generation New platforms are gaining Extend leading scale – driving growth and MCN position monetisation opportunities and drive monetization 2nd Our MCNs enjoy high audience growth
3rd New short-form video platforms
4th Continue to build the RTL Group Digital Hub
Linear Non-linear
12 3 Digital first brands We are building digital brands in key verticals…
3 Invest in #1 IN #1 IN #1 IN digital first PRE-SCHOOL FASHION/BEAU HIP-HOP brands, KIDS TY expand web original content Gaming Music Sport News Entertainme Kids Lifestyle Fashion nt & beauty & Comedy
Examples: non-exhaustive Partners
13 3 Digital first brands … as well as ramping-up our web original content
Illustrative examples only RTL Group web original content Purely commissioned for web, excl. branded content Estimate
~2400hrs
BBTV incl. YB & 1,764 Stylehaul
1h15 movie on YouTube #1 Pre-school Kids MCN on FM ~500 75% of budget covered by YouTube Broadcasters product placement Creating in-house kids content 130 3.3 million views at scale FY 2015
14 Source: Web original content is still a rough estimation, Broadcasters includes web original content from GE, FR, NL 15 content inStrategic priorities Fremantle
Short form Long form B C
Develop the the Develop Higher invest Higher pipeline Build a scalable digital business is positioning itself in all ‘Total Video’ quadrants
Content
core business business core and maximize and Maintain the the Maintain the network the Lower invest invest Lower
A
C B A
Develop new verticalsnew Develop YouTubedistribution off Strengthen chain across valueExpand strategy scripted the Accelerate formatsnew Create territories new to formatsout Roll air on hits Keep existing
-
4
4 Develop pipeline Our scripted strategy is showing growth potential
Major series American Gods Continued success in non- Wide range of new 1 and Young Pope progressing 2 English language 3 commissions / developments
American Gods (Starz) First subtitled drama Hard Sun (BBC/Hulu) ever to be aired in the Euston Films’ first commission. Casting for major roles US complete In pre-production Highest rated subtitled Filming started, launch in drama in UK history Wentworth (SoHo Aus) 2017 S4 launching, two more commissioned Amazon Prime deal just #1 in the Scandinavia signed 2 international remakes Season 2 in development Picnic at Hanging Rock The Young Pope (HBO/Sky/Canal+) (Foxtel) Season 2 in production FM Australia adaptation of 1970 Paolo Sorrentino mini- UK adaptation in series starring Jude development (Euston) mystery film Law and Diane Keaton Ruby King (ITV) Produced by Wildside Successful launch season on Canal+ Euston Films legal drama Launches this October At script stage with Graham Mitchell following special 2 part Second season premiere at Venice Film commissioned Baghdad Central (C4) Festival in September Euston Films post-war Iraq drama At script stage with Stephen Butchard
16 5 Ad tech Offering publishers ‘Total Video’ monetisation capabilities at scale
Demand-side Ad- Supply Side Advertiser Publisher platform (DSP) server platform (SSP)
Multi-screen delivery / ad-serving SSP / Yield optimisation
Booking, reporting and forecasting tools 1,300 Addressable TV (Connected TV / HbbTV) PUBLISHERS Cross-screen optimisation GLOBALLY Programmatic ad sales for linear TV
Expansion and roll-out in Europe and Asia Strategic Grow premium private market places goals Building fully integrated ad stack
17 RTL GROUP
TV stands for Total Video
Deutsche Bank London, 8 September 2016 Guillaume de Posch