week 23 the RTL Group intranet Newsletter News Belgium RTL Belgium launches the digital platform RTLinfo People Germany Gerhard Zeiler speaks at the Inter- United Kingdom nationaler Mediendialog in Hamburg Jay Hunt appointed as Five’s new Director of Programmes RTL Television provides competent reporting from the G8 summit Spain Become a presenter on Antena 3 with Tuclip.com week 23 the RTL Group intranet “Pulling together as a team” Giving the new Backstage a spectacular start, RTL Group CEO Gerhard Zeiler speaks in the intranet exclusively about the company's pre- sent situation, current developments in media policy and some of his personal opinions. Gerhard Zeiler Luxembourg – 01.06.2007 You've been the CEO of RTL Group since give rise to intensive, impassioned negotia- 2003, so you've occupied that position for tions. But when the Group's interests are at longer than any of your predecessors at stake, everyone pulls together as a team. It's CLT-UFA and RTL Group. What's your important for RTL Group to have a strong, crea- assessment of the Group's position at this tive production company that is active worldwi- time? de. Some people used to doubt the value of Our company has never been in better shape. such a production company to RTL Group, but Never have its revenues, results or profit margin today we are envied for having Fremantle- been higher. Media. What achievements are you particularly The Group’s radio business is relatively proud of? modest. How does it fit in your overall stra- RTL Group is not only Europe's biggest TV, tegy? radio and production company, but also histori- Today, radio is one of our company's activities, cally the most important operator on the Old part of our identity and invariably a source of Continent. Having said that, it took a long time success. Our flagship radio station in France, for a truly cooperative, efficiently functioning RTL Radio, is currently riding the crest of a entity to take shape following the merger of its wave, attracting more listeners again and three constituent companies, CLT, UFA and coming top in all the relevant categories. Its Pearson TV. The company does now operate staff did a great job of covering the presidential smoothly, and this of course is primarily down election in France, and their great skill and pro- to the mutual trust underlying the cooperation fessionalism boosted the brand. In addition, between the Group's managers and staff. We RTL Radio Deutschland has transformed itself practise decentralisation and advocate the from a source of concern into a highly profitable delegation of responsibility, yet at the same business within just a few years. time we thrive on cooperation rooted in partner- ship. As long as this remains the case, our staff The company is still listed on the stock and shareholders can be sure of a steady rise in exchange. Will that remain so or will the value of our company. Bertelsmann increase its shareholding? That's a decision for the shareholders, not How do you see the cooperation between something for us to comment on. The manage- the Group's channels and its production arm ment of RTL Group has an obligation to all sha- FremantleMedia? reholders, including its small shareholders. But Both parties conduct their business very inde- it's good news all round that RTL Group reliably pendently, which is exactly how things ought to makes a major, positive contribution towards be. Just occasionally this state of affairs may Bertelsmann's overall value. Last year we 1 week 23 the RTL Group intranet “Pulling together as a team” - continued accounted for 43% of Bertelsmann's operating What kind of TV do you yourself like wat- result. In other words, RTL Group is a very ching? lucrative investment for Bertelsmann! Mainly major entertainment formats that bring the whole family together in front of their TV set; Last year and this year again, Bertelsmann's programmes like Pop Idol, Let’s Dance or Wer priority has been to reduce its debts. wird Millionär? (Who Wants To Be a Million- Wouldn't RTL Group be more flexible as an aire?) and I'm also a big fan of House. independent company? Certainly Bertelsmann benefits from RTL Does the Internet also mean a lot to you? Group, but at the same time RTL Group also Being a distribution platform for TV program- prospers from belonging to a global media and mes, the Internet means a tremendous amount services company. to me. Furthermore, for me – like virtually eve- ryone else in the Western world – the Internet is But when will RTL Group start growing again an obvious, everyday tool. Having said that, I'm by making some acquisitions? really not much of a chatter, preferring to deal First of all, even in 2006, we boosted our reve- with people personally or over the phone. nues by €580 million – more than 10% – and managed that without making any major acquisitions. By comparison, before Pearson TV was integrated into our Group, its reve- nues totalled €535 million. Today, on its own FremantleMedia, as our pro- duction arm is now called, generates revenues in excess of €1 billion. So we can draw on considerable poten- tial for organic growth. Our demands regarding potential acquisitions are now very high: they have to fit in our portfolio; the price must be justified; and there must at least be some Gerhard Zeiler in his office prospect of RTL Group wielding influence over them. One of your previous posts was as CEO of ORF, Austria's public broadcaster. How do For many years now you've been a TV mana- you view the importance of public broadcas- ger involved in operational business. How do ting in Europe today? you draw on this experience in your capaci- In the long run, public broadcasters will find ty as Group CEO? that trying to combine income from licence fees One thing I've learnt from my experience is the with advertising revenues will prove an impossi- need to show great restraint when issuing good ble balancing act. If public broadcasters intend advice. In my days as CEO of a TV channel I to continue justifying their existence as such, at very clearly remember saying a rather tight-lip- some stage their dual obligations need to be ped thank you for any tips I received from redefined. Let me be quite clear on this: in the Luxembourg on how I should run my business. long term it makes no sense for public TV chan- nels that are funded via licence fees to focus But surely you're still itching to be involved ever more keenly on the target groups coveted in the operational side of things? by advertisers and screen their more discerning Yes, I love television. I love watching shows live news and educational programmes shortly in the studio or discovering new formats at before midnight or sideline them by shunting screenings. Of course, this understanding of the them onto special-interest channels. operational side of things and my passion for TV helps me in my dealings with our profit centres. The European Union's culture ministers But it is the respective managers who remain recently adopted a new version of the responsible for their business – and I have no Television Without Frontiers Directive that intention of questioning this arrangement. regulates the basic conditions applicable to 2 week 23 the RTL Group intranet “Pulling together as a team” - continued TV advertising in Europe, among other version of the directive will permit product pla- things. What's your opinion on this compro- cement in films and TV series, under the provi- mise? so that viewers are alerted to its presence. It eases some of the present rules governing TV advertising, which are very strict. In this res- You and other TV bosses are usually judged pect, the new version of the directive repre- in terms of revenues, profits and ratings. sents a step in the right direction from the view- How about the values that RTL Group's point of RTL Group's channels. At the same channels are intent on conveying? time, we still haven't made as much headway We have obligations to our customers. The pro- as we believe needs to be made. In today's grammes we offer are geared to the tastes of digital age, channels need more flexible guide- our viewers, users and customers, who should lines when and how they are allowed to broad- be able to watch what they want, when they cast ads. With such a wide range of channels want, where they want. The content we produ- on offer, viewers will very quickly show what ce and broadcast every day is not only entertai- they do and do not accept. They are our most ning. It helps people understand political and effective regulators, effectively voting with their social issues. Every day, our editorial teams remote control. uncover irregularities and shortcomings and criticise wrongdoing. Some programmes pro- At the same time, the highly controversial mote a sense of community, provide support to practice of product placement is now per- those who need it, foster solidarity or simply mitted. appeal for donations to a good cause. We Some of the arguments in that debate were understand the world we live in through televi- downright bizarre. No TV company wanted to sion, radio and the Internet. They encourage introduce surreptitious advertising in news pro- communication and sometimes even provide grammes, magazines or even children's pro- very direct help. grammes. Their main concern was to reach a sensible arrangement for product placement in But at the same time, major media compa- films and TV series.