Latest / The Media Odyssey / WHY BROADCASTERS ARE PARTNERING WITH THE PLATFORM THEY ONCE FEARED
Transcript
- Announcer: [00:00:00] Please welcome to the stage Pedro Pina, the Vice President of YouTube EMEA, Stefan Schmitter, the CEO of RTL Deutschland, and of course leading the conversation is someone who always gives us a very fresh way to look at the changing [00:00:15] industry, the media cartographer, Evan Shapiro.[00:00:30] Evan Shapiro: I'm thrilled to be on the stage with you both. And this partnership, I believe is a case study, a perfect case study for legacy media thinking as a [00:00:45] creator, thinking for this new moment, thinking for new audiences. So before we get to the conversation, let's take a look at some of the work that RTL is doing. Video: We unite big stories with local gems. [00:01:00] Great desire with unstoppable drive. Real connections. "Oz?" With wild fantasies. "That was [00:01:15] really nice." "It's official homebody." "Are we doing this?[00:01:30]" [00:01:45] Evan Shapiro: Great stuff. Stephan Schmitter: Thank you. Evan Shapiro: I think [00:02:00] there's this, these talking points that a lot of mainstream media in regions around the world, they call it pivoting to digital. But really what they wind up doing is cosplaying digital. They don't really do it, they don't commit to it, they [00:02:15] don't see it as a co-equal part of their legacy platforms. You frame this partnership with YouTube as a partnership of equals, which is a very different approach. What does that mean to you? Stephan Schmitter: Yeah, I think for us it's important to have these partnerships, [00:02:30] and to be honest three years ago we had no relationship or partnership with YouTube, and then we- Evan Shapiro: Just three years ago? Stephan Schmitter: Three years ago. We defined it new for us for RTL, and especially now for Sky, because I think if you define YouTube as a additional channel, and we have so [00:02:45] many channels, we are number one in local linear TV, and we are number one in local streaming, number one in pay. So we have all these channels, and to have now an additional channel where we can use the reach, the power, and also the transformation [00:03:00] from the older business to the new business, this is very, very helpful. And I think you need clear roles for this, you need a clear strategy for this, and you need great partners where you can discuss everything and try out. It's more like a trial and error to bring the [00:03:15] best things out of this partnership. Evan Shapiro: I think one of the great fears that mainstream media has with regards to working with, social video platforms, specifically YouTube, is that it's gonna cannibalize. There's this mythology around cannibalization. But I think what you're finding is [00:03:30] that the, the reach that you're finding on YouTube is additive. It is new audiences and new revenues as well, correct? Stephan Schmitter: Yes, for sure and I, my fear or theory of my team is that the audiences live more and more in bubbles. There's a YouTube [00:03:45] bubble, a huge one, to be honest. There are Netflix bubble, an Amazon bubble, a TikTok bubble, and so on. And if you try to reach as a classical media house all these targeted age groups, you are lost. You have to define these partnerships, [00:04:00] especially on the YouTube end, because they have the younger men, and you can attract these age groups with your very successful formats at all. Because we have such a big catalog, we have this premium long-form content, but [00:04:15] our task is, our competition is to bring that formats to these new targeted age groups to attract them and to find a way that they switch from YouTube to our classical channels [00:04:30] to subscribe for RTL Plus, to subscribe for Sky. That's important for us and for these, this journey we try to find the ways, yeah. Evan Shapiro: Yeah, and the audiences are moving back and forth. At this at the Edinburgh TV Festival this year, you gave this [00:04:45] pretty dramatic speech, where you at, in the MacTaggart Speech, which is the address, which is this landmark speech in the UK. You described the current moment where people paint YouTube as the villain of the story, that the demise [00:05:00] of traditional media is at the hands of YouTube, but you said that's not true, that partnerships like this are a key to the future of television, and you said that partnerships like this particularly, I think this is a great case study, are going to bring and to usher [00:05:15] in a new golden age, a third golden age of television. What the fuck does that mean? Pedro Pina: Great. The core for people to understand is that we [00:05:30] as as a platform, we are not invested in producing content. That we believe that there are incredible companies around the world that really understand what beautiful content looks like. And we see this with our [00:05:45] own creators on YouTube, but we see this also in great companies like RTL. They produce, we've just seen a video we just produced... They produce some of the best content. They should be part of it, but also produce some of the best content that deserves to find an [00:06:00] audience. It turns out that we have a significant part of the audience that comes to YouTube to find the videos they want and love in all different devices. We are committed to deliver the content people want, any device, any moment, any time, on any [00:06:15] format. That is our commitment, is a distribution and platform-based commitment. But we need the content to be there. And we believe that content as amazing as RTL's [00:06:30] deserves to find the audience. The audience is in the command of their own viewing choices, and the only thing we need to make sure is that the content can be delivered there. We want to work with partners such as RTL to make sure that they understand the YouTube [00:06:45] platform really, really well. RTL in this case, as most of our partners, they're in full control of what they upload. They are in full control of deciding what to put up, what to put down, how to monetize, when to monetize, which [00:07:00] formats in which areas, how much to export, how much to keep in Germany. All of that is up to our partners to define, and this is the beauty of this partnership, is that we work together to make sure that RTL is successful. And the thing about YouTube is that [00:07:15] we cannot be successful if our partners are not successful. And that stems from our revenue model. Our revenue model is a video-by-video, minute-by-minute success model where we share the revenue [00:07:30] that we generate with the content that stays on the platform, but only if that content is successful can it monetize. If it's not successful, it won't monetize, and if it won't monetize, we make nothing out of it. So we share more than half of the [00:07:45] revenue with partners such as such as RTL, and we want them to be successful. We want, we need them to be successful with their audiences, and that's why we're so happy with this partnership. Evan Shapiro: I think there are a lot of folks, who make this move, right? They reach out, and they start [00:08:00] to put content on YouTube, and then they are, they, to your point may not understand exactly how the platform works. They expect the programmatic ad fill to be the whole business, and they're surprised when it's not necessarily achieving the goals that they wanted. [00:08:15] But that's not been your approach. To Pedro's point, you're putting a ton of content up on this platform, very diverse set of content, news and sports and long-form premium dramas and things like that. But in particular... Actually, let's throw up a slide [00:08:30] with one of the shows that you have called Cobra 11. So this is a really good, example. So you've put full episodes. Can you talk about this show? This is a, this is an action drama that you've really embraced the platform with. Stephan Schmitter: Yeah, I think we should make it a more, little bit more concrete because many guys in [00:08:45] the audience asking theirselves, themselves, "Are you really sure, Stefan? This is a good combination with YouTube?" Yes, it is. Here's one of our best examples, so to say. This is about Cobra 11, which is a action series, a very successful and well-known one in [00:09:00] Germany. It's on air since 1996, and it's sold to one hundred twenty countries worldwide. And what we did, we put around 200 full episodes, old episodes of this whole stuff on YouTube. And to be fair, [00:09:15] these old episodes had no value anymore in our ecosystem because it had been on- Evan Shapiro: Burnt out. For sure. Stephan Schmitter: It had been on RTL with 40 reruns on RTL Plus and so on. So the question is how we could bring out of these 200 episodes a real value for [00:09:30] us, and there's, there are two values for us. First of all, we got the monetization because of the sharing of the advertising revenues, and you can see there that we have around three, 30 million views on that content within the last [00:09:45] 365 days. And on the other hand side, there was a clear funnel, or there is a clear funnel up to RTL Plus subscriptions. So the people, and especially the young men, and our theory was that young men [00:10:00] today also love big stunts, flying cars, big explosions, German autobahn with no speed limits, and exactly the case. They discover, they rediscover a love for Cobra 11. Evan Shapiro: They discover. These are new audiences Stephan Schmitter: [00:10:15] It's a new audience. Yeah. They discover, or the older ones rediscover. So 83% of the viewers on YouTube are male. They're on average 30 years a, 30 years old. And then- Evan Shapiro: And a long watch time too, right? Stephan Schmitter: Yeah, a long, very long watch [00:10:30] time. And then if they ask for, ask themselves for new content, for the new episodes, for more flying cars and explosions, they have to go to RTL Plus. And this is exactly the case. And we had [00:10:45] 123% more first video views on RTL Plus with this content with the funnel of YouTube, and we had around 26% more subscription on RTL Plus with this content. So for us it's a real great model, and it shows exactly [00:11:00] that you have to define it format by format, channel by channel, what exactly want you to achieve, what want you to do, and what should be the outcome, what would, would be the best outcome. And Cobra 11 is a very, it's one of our biggest cases together, [00:11:15] a very successful one. But we have such a big format catalog because we are now 40 years old on RTL, so I think we can do a lot of other stuff. Evan Shapiro: And that's, and you made this point earlier, but one of the key reasons why this works so well is you're, they're watching on TV [00:11:30] right? They're watching YouTube on television more and more, especially for a show like this that needs to be seen on a big screen- Stephan Schmitter: Absolutely. Evan Shapiro: To appreciate the explosions and the gunfire and all that kind of stuff. And it's one click away from your app right? From the YouTube app on TV to RTL+. [00:11:45] I think that's one of the things, you've made this point several times with me on stage, but I think it bears drilling in on more again, which is the programmatic ad fill is nice, but it is not the whole business. This is a lift for your entire platform. YouTube is a sales [00:12:00] platform for RTL, RTL+. Pedro Pina: No, that's right, and the, there are several things to say about that. But one of the things I love about this is that it speaks to the core of what we know about YouTube, which is all about fandom. What you are activating [00:12:15] through this partnership with us is the fandom, the people that are fans of Cobra 11. They discover this IP, they fall in love with the IP, they want to follow, they want to see what the new episodes are. So inevitably they fall in love with a catalog. So first of all, you're [00:12:30] monetizing a catalog that was collecting dust, quite frankly and all of a sudden it monetizes. You, not only you're monetizing, but you're drawing insights and developing fandom out of something that was forgotten from the past, and [00:12:45] you're driving new excitement to feed into a new IP, and which brings a lot of insights into how to develop new content and on how to make that fandom really, really happy. And to your point, a lot of the viewership is now happening on [00:13:00] the large device at home, which is incredible. It's a co-viewing experience, which is amazing. It monetizes very, very well, higher CPMs in average, which is fantastic. Great opportunities for shopping, which is amazing. And on top of it, a lot of our [00:13:15] partners do also, with, with formats such as this, they also allow themselves to sell their own inventory at their own CPMs. So this is something that we don't, so it's not machine selling. It's actually a lot of our [00:13:30] partners have their own sales force driving higher CPMs, higher levels of monetization for this big, big ticket item. So all in all, it's just this self-reinforcing partnership that can only produce value. But again, the value that it produces, [00:13:45] interestingly and importantly, is feeding into the IP that is already successful and breathing new life into stuff that was already successful before, and that that is so energizing. And it is the model of creators. So [00:14:00] back to your point initially, Evan, of, Evan Shapiro: Thinking like a creator... Pedro Pina: A lot of, thinking like a creator is look at your IP. You are some of the best YouTube creators already. Evan Shapiro: They are the best. They are the, if you put up 200 episodes of a show that's professionally produced like [00:14:15] this with car crashes and gun, you're gonna outperform a lot of platforms. Pedro Pina: That's right. That's exactly right. Evan Shapiro: Because it's awesome stuff, right? So you mentioned the various revenue inputs, and y- just to double-click on some of the data here, platform sales, platform revenues increased over [00:14:30] almost 500% for RTL Plus, right? But there's this to your point, relying just on the programmatic ad fill is not really the business model here. Pedro mentioned this. You're selling your own inventory. You've formatted, [00:14:45] formulated something or, created a new department called Ad Alliance, which is selling your inventory. So you've got this great content, right? But you've got Sky Sports. You've got a lot of other content. So you're putting tennis matches and other sports, Tennis Thursdays, right? [00:15:00] Is the- Stephan Schmitter: Tennis Thursday. Evan Shapiro: So talk about Ad Alliance and the partners program 'cause we have talked about this before, but again, the model here is to drive up the CPMs yourself for your own inventory and what you're doing, I [00:15:15] think, is best in class worldwide, is packaging RTL Plus, RTL, Sky, and YouTube inventory together. Can you talk about that that theory? Stephan Schmitter: Yes. That's exactly the case for the Ad Alliance because the Ad Alliance has very good relationship with all the advertisers in [00:15:30] Germany. We have this great content portfolio from sports to live entertainment, from news, trusted news, to, to big, films and series and so on. And now we have this additional channel and the Ad Alliance, especially as you [00:15:45] mentioned on the big screen, can now sell this whole funnel, this whole inventory in total. And this is a real chance for us because for us it's important, strategically important not only to have this reach. The [00:16:00] question is how we can monetize this reach and could really get a value out of it in advertising, but also in subscription and all the other monetized opportunities. So now we can go to the, advertisers, to our [00:16:15] huge portfolio of advertisers, and have this 360-degree funnel excitement for them. And this really works out, especially on the big screen, because it's only one switch away. So if you're on mobile, you have to switch your [00:16:30] device. But now on big screen, it's about switching from one app to the other, and this really brings us the subscription because it's easy for them. It's like a remote control, but it's all happening on one monitor, all happening on one remote control, one sofa, [00:16:45] so to say. And this is, this combination is logic for the advertisers and they understand what we are doing. They ask very heavily and very interested in, interesting what we are really doing there because what's [00:17:00] about YouTube and the inventory and now you share it. But in the end we get additional money and our revenues are significantly up this year, so it works all out. We are near to double digits millions, with these revenues, and [00:17:15] we have a clear path with YouTube until twenty thirty to get incremental money out of the market with this combination of linear long content stuff together with the new or with the digital reach and the whole [00:17:30] setup of the YouTube world. Evan Shapiro: And it's not just an additional platform, it's an additional audience. I've made this point a couple times, but when you walk into the advertiser with you... The great thing about this case study is we have a 36-month comparative timeframe to look at, right? So 36 months ago was one thing. [00:17:45] You were selling the audience that you had on television, RTL Plus, RTL Main, Sky. Actually you didn't have Sky then but you were selling the television product. Now you're walking in with two different audience, or a combined audience that's much larger And more diverse from an age [00:18:00] standpoint as well. How are the advertisers reacting, you talked about the revenues, but aren't the advertisers, now I can go to RTL as a one-stop shop to get this entire audience across all these platforms. They must be reacting well to that. Stephan Schmitter: They react very well on that [00:18:15] because so to say we are on RTL+, we are a young streamer. We are thirty-four years in average, but very female-driven. From the YouTube side, now we got the male audience on top. So it's an ideal combination for the advertiser, and it's [00:18:30] logical for them that this is a, very good and partnership setup. So it's exactly what we got as a reaction. Also, that we try it out, also that we can deliver new stories for the advertisers. So we are [00:18:45] planning, this is not a secret, we are planning to air maybe five to ten minutes of a soccer game just exclusively on YouTube, and then to have the switch on the big screen from the YouTube side, hopefully to a subscription on RTL+ or Sky, [00:19:00] which would be good for us. Or we are planning, other different, content stories, which also a story for the advertising market because they all search, they all ask for new stories. They all [00:19:15] search and ask for these combinations. They want this one-stop shop, and we with our huge portfolio, we can deliver. And what is important for us and what is the magic of our partnership is that we as RTL could [00:19:30] define which play, which which role YouTube plays for us in every single case, format by format, window by window. And we discuss it with a very competent team of Pedro and his guys, what is the best, what could we [00:19:45] try out? And afterwards, we analyze what really happened about that about Alarm für Cobra 11 or the Tennis Thursday, and so on. And this, makes us better at the end and makes us more, [00:20:00] exciting for the advertising market as well. Evan Shapiro: YouTube, you said this many times on stage, but again, I think it bears repeating, which is you sell audiences, right? You don't sell shows. You don't sell channels in particular. You sell audiences broadly in regions, [00:20:15] and that you can't offer what RTL is offering even on your own platform. In addition, you talk often about how the, it's not about just selling ads in these things, it's about lifting your entire business. The subscriptions, all [00:20:30] the other aspects of this. So what does this case study in your mind here teach? Other traditional media companies around the world about this type of partnership? Pedro Pina: Yeah, it's an incredible honor to be [00:20:45] here on stage with RTL and with you because the, what it teaches us is, number one, it is possible to be an iconic brand in a very [00:21:00] well-established industry and evolve and adapt. It's possible. There is still a, there's some who don't believe in the need for change or are looking for different solutions for change. Evan Shapiro: Afraid of it too, let's be honest. It's not just they don't see the need for change, they're afraid of [00:21:15] change, I would say. Pedro Pina: They're afraid or they don't want to, and one, one of the things that was incredibly inspiring was to see how RTL, after a few conversations and a few meetings and a Stephan Schmitter: A few ones. Pedro Pina: Yeah, a few, they decided, [00:21:30] let's go for it, first of all. And so there is something to be said about breaking the mold of 70 years or 60 years or 50 years in the industry and try something new. Number two, not being afraid of [00:21:45] trying, it's really important. One of the beautiful things, and I say this over and over again, one of the beaut- the beautiful things about YouTube is that you can experiment until the cows go home, and if it doesn't work, shut it down, start again. If this format doesn't work, try a new format. No one's watching, [00:22:00] so if it's, visibly, if you do something on YouTube that is not successful, it's because no one was watching, so you can shut it down and try it again. And this philosophy of experimentation, which is very much in line with how the industry works right now, [00:22:15] really, really works. And then and it visibly works. And then the third thing that I love about RTL's perspective here with this partnership is we are a very important partner, but we are not the only [00:22:30] solution for RTL. So a lot of the partners in the TV industry, a lot of the players in the TV industry look at YouTube as first a villain, and then the all-encompassing solution, and I wish life was the s- Evan Shapiro: Neither of those things. Pedro Pina: [00:22:45] Exactly. And I wish life was that simple, but it really, really isn't. And when you look at the RTL solution, it's a combo of things. It's, how you distribute the content, how smart you are about the formats, where do you place [00:23:00] them where how do you work with a portfolio. There's nothing wrong with FTA. The audiences are decreasing, but FTA continues to be, linear TV continues to be a very important chunk of the business, and you cannot just turn your back on it. So the way they continue to [00:23:15] lean in on their linear TV, as they should, together with YouTube, together with RTL Plus, together with whatever other formats, it's, a, it takes a village to actually move this business forward and continue to grow. We [00:23:30] want and we are a very part, a very important part of the, partnership and the solution, but we're not the only one. Because at the core is the competency of RTL and the superiority of RTL's ability to understand the [00:23:45] audience and produce that content for that audience. That is at the core. We cannot make the audience fall in love with RTL's content, only RTL can. So and that is why I think it's so inspiring. Stephan Schmitter: But you can add [00:24:00] some things. I think there's also a good point to make that YouTube can add creator content around pre-shows, highlight shows, and so on. Evan Shapiro: You're doing that with Stephan Schmitter: Additionally what we could not produce, and you have the competency, you have the [00:24:15] creator network, and what we can do afterwards is to create a flywheel because we can take these creators and make them successful in the mass market. We can see with all our shows, Let's Dance or I'm a Celebrity... Get Me Out of Here! So these [00:24:30] creators want to be part of it because they have these YouTube followers, millions of them, but they- Evan Shapiro: They like the validation from your media as well. Stephan Schmitter: Yes, they like it because it's, it's- Evan Shapiro: They can tell their moms they're on TV. Stephan Schmitter: Yeah, because they love it if they go to a [00:24:45] supermarket and they are well-known by older people, you know. So they see exactly what linear TV and all the other stuff can do for them, and this is what we can create together. So we have these additional shows or these additional pieces [00:25:00] around our long format content, and we take a value out of this also for our shows and our environment. So I think this is a good circle of, for everybody. Pedro Pina: So Evan, this is the golden age of TV that we've been talking about. Evan Shapiro: That is exactly what you're describing. [00:25:15] Pedro Pina: This is the combination of the two. Evan Shapiro: Definition of what it is. The "yes and" of it all. So we've got only about three minutes left. Let's talk about politics. We were just talking about politics backstage, but tell me, tell the audience here, 'cause [00:25:30] 52%, 54% of the world now gets their news from social video or social media. And that's because I think, and some of the polarization in the world out there is because mainstream media has avoided distributing news, journalism, [00:25:45] on social video. Can you talk about what you're doing with your news? 'Cause it's, to me, it's one of the most fascinating portions of this. An event happens in Germany, and you're putting up a live stream of your news on YouTube to reach the audience there. Talk about what the decision-making was there and how it works. Stephan Schmitter: Yeah, I think [00:26:00] the political situation in Germany is, so to say, hard at the moment or very- Evan Shapiro: Yeah, I hadn't heard. Stephan Schmitter: Very complex. And I think our responsibility is to also reach all the audiences with just [00:26:15] around the social media stuff on TikTok and so on. I had, I have a little girl, she's 16, and she is watching YouTube, she's watching TikTok. But what I, what I learned or what [00:26:30] I said to her is, "You have to use our channels and our brands on YouTube and TikTok because these are proper news." Evan Shapiro: Verified news. Stephan Schmitter: This is verified. Evan Shapiro: Verified journalism. Stephan Schmitter: This is trusted content. We invest a lot of money. We have the number one news show in Germany with RTL Aktuell within the younger age group.[00:26:45] And I think for us it's important, and also for our role in the democratic system, to reach everybody. And that's why we decided that we put our news channel, N-TV, on YouTube as well, that we- Put little pieces, short videos, [00:27:00] also together with good journalistic creators on YouTube to reach the people. And I think this is an important part to stabilize the political situation in Germany as well, I know. Evan Shapiro: And around the world. Stephan Schmitter: I feel responsible for that to be honest. Evan Shapiro: Yeah, around the world, too. I [00:27:15] know you feel very strongly about this. So in our last minute here can you take us out by saying how, why is this important? Why is this move important? But Beyond the business reasons. Pedro Pina: Yeah, the, politics is about [00:27:30] persuasion. It's about presenting your arguments and winning your arguments. This is what politics is all about. And democracy can only be strong if we can hear the arguments from everyone, and you can measure up what the arguments are from both, for [00:27:45] three, four parties. Evan Shapiro: And reaching the whole populace. Pedro Pina: And then form your own opinion. And what we believe YouTube is this huge platform where all voices can be present, all arguments can be presented, [00:28:00] and what's important is to make sure that all voices are there. And sometimes some of them were missing, and when partners like RTL starts leaning in, and we've seen this with the BBC, the BBC in the UK started leaning in on YouTube, and right now [00:28:15] the BBC is the largest new English-speaking news channel in the world. It's happening with the BBC. The same we hear from France Télévisions in this country. The more... Evan Shapiro: And TF1. Pedro Pina: traditional [00:28:30] players start leaning in, on YouTube, the more a cross-section of voices can be heard, and that can only be good for, be good for democracy. Beyond that, we treat news really, [00:28:45] really specially in YouTube. We give, our recommendation systems recognize when the sources of news are from, authoritative voices, and they, of course get the, get the special place on [00:29:00] recommendations that they should. So that's a very strong commitment. Evan Shapiro: And that's what you meant. When you talked about the golden age of television. Pedro Pina: That's exactly right. Evan Shapiro: That's exactly what you meant. We are out of time. Thank you, sir. Thank you, sir, for this. Let's go out with a special message from YouTube. Thank you all very much. Pedro Pina: Thank [00:29:15] you. Video: When your stars "What's your name, lad?" "Alex" and our stage come together, big things happen. Your highlights. "Into the net." Fuel hot takes. "Relax yourself. Just cool your jets. I'm not cooling my jets." Your classics "Released 1884, and it [00:29:45] rages on." Find fresh fans. Your reporting "Who else is there that's bringing expertise and depth to these talks?" Gets the reach it deserves. "There's a massive storm that's heading this way. This has been ongoing for-" Your epic scenes [00:30:00] have behind the scenes. Your recipes- "Cooking a British roast meal." Go global. Your drama- "Get us out..." [00:30:15] goes deeper. And your Saturday night becomes every night. Let's dream bigger together[00:30:30] Evan Shapiro: Everybody. Pedro Pina: Thank you. Stephan Schmitter: Thank you.