Channeling a new niche

Though the carve-up of Tele 5 may have been the bitterest defeat in Tele-Munchen’s history, it may also have been the best thing that ever happened to the company.

Tele 5 was Germany’s third private general entertainment broadcaster, after giants RTL and SAT 1. Then media magnate Leo Kirch appeared on the horizon. His son started up Pro 7 in direct competition with the small, struggling Tele 5, and Kirch began infiltrating the latter’s board by getting involved with two shareholders, fellow media giants Axel Springer and Silvio Berlusconi.

When it became clear that Kirch wanted to turn Tele 5 into a different kind of broadcaster – parts of Tele 5 later became DSF, Kirch’s sports channel – TM topper Herbert Kloiber bailed out.

What Kloiber got out of the deal, besides a kick in the pants from his biggest competitor, was a whopping near-200 million marks ($135 million) for his 26% share in the debt-laden station, plus a powerful new partner, the publisher Bauer Verlag.

In June 1992, TM immediately started working on a new channel – RTL2 – with media combines CLT and Bertelsmann. Both Kloiber and Bauer, which had never invested in a TV station before, were minor shareholders at first. But then the authorities forced CLT and Bertelsmann to reduce their shares on the grounds they already had too much influence in other channels. TM and Bauer found themselves with 33.1% of RTL each, and by March ’93, RTL2 was on the air.

RTL2 now has an 80% penetration and has passed the 5% market-share hurdle. More than 75% of its viewers are under 50 years old. It still has a long way to go to reach its next biggest competitor, Kirch’s Pro 7, but it’s well on its way.

RTL2’s programming is very similar to that of Tele 5 (not to mention Pro 7): young, with a lot of American series and movies. RTL also produces original children’s material, plus racy news and variety shows. The newest project is a series of genre-oriented telefilms- thrillers and comedies.

“We have shareholders that are capable of providing us with important programming,” says RTL2 managing director Rudolf- Markus Reischl. “For example, product from ABC, CBS and MGM, which we get via Tele-Munchen, has been very important in RTL2’s fast growth.”

Once RTL2 was off the ground, TM and Bauer took a good look at each other and found their broadcasting goals were much alike.

“This may sound strange,” says Bauer’s electronic-media head Friedrich-Carl Wachs, “but our partnership with TM is a strange one. Here you have two charismatic entrepreneurs (Kloiber and Heinz Bauer) in two different media sectors – TV and print. Neither had much business in common when they started out, but they developed a strong liking for each other as they went along.

“With RTL2 on the rise, the relationship got stronger and stronger, and the success has been something we could both enjoy. That was what made them invent the new niche channel TM3.”

Bauer Verlag is a family biz, now in its fourth generation, that heads the market in youth, women’s and TV-guide magazine publishing. One of their best-known publications is “Bravo,” which accompanies most German teens through puberty and their discovery of sex, first love and young rock stars. “Bravo TV” is one of RTL2’s minor hits.

With 8,500 employees, and a 1994 turnover of some 2.8 billion marks ($1.9 billion), Bauer is Germany’s second-largest publisher. “So, though we are a dwarf dealing with giants in the electronic-media sector,” says Wachs, “with 33.1%, we have a big voice in RTL2. And as we’re a giant in the print sector and in TV guides, it’s not a good idea to get on our bad side.”

Bauer has already taken its first steps in turning RTL2 and TM3 into cross-marketing vehicles. After creating “Bravo TV,” it turned to the erotic show “Peep!” (Bauer also publishes the German-lingo Playboy under license) and two women’s shows on TM3 – “Heart Attack,” a call-in show for young girls, and the morning/afternoon infotainment talk and news show “Frieda.”

“From the point of view of a publishing house,” says Wachs, “RTL2 and TM3 make perfect sense in cross-promotion and creating new ways of selling advertising time. What we envisage is to offer opportunities to the same target group in two different media. For example, a cosmetic manufacturer could place an ad in a women’s magazine and run a spot in – or even sponsor – a TM3 show without full costs, because it can be packaged. This is our aim; we’re not there yet.”

All four Bauer shows are produced by Hamburg-based Me, Myself & Eye, 35% of which Bauer owns. Both Bravo magazine and the TV shows are marketed by the same company, IPA, which also markets TM3.

After three music channels, two news channels and two sports channels, TM3 is Germany’s first femmecaster. However, the station’s launch last month was the center of a flurry of press attacks. The web was slammed for having a male topper and a perceived lack of programming concept.

“If the fact that I’m not a woman is the only problem with the station, we’re happy with that,” says managing director Jochen Kroehne. “My job is to take care of broadcasting licenses, advertising, satellite – I have to sell the channel. When it comes to content, that’s all decided by women. In fact, we’re the first TV station where you can find women in all the prime positions.”

Kroehne calls the flack over lack of concept “a press invention.” He says, “We called a congress in Cologne, because we wanted to make the project public. We invited 500 top female execs and had a huge discussion under the slogan “What Do Women Want?’ It was meant as a provocative question. But the journalists took it to mean we didn’t know what we wanted to do.”

Though Kroehne and his team examined women’s channels from the U.S. to Hong Kong, he says, “Germany is a little different from other countries, because of our 20 years of (female) emancipation. A housewife channel wouldn’t work here, and neither would a feminist, women’s lib-type channel.”

Newscaster Anna Doubek, TM3’s new anchorwoman and editor-in-chief in charge of productions, says, “In the U.S., there are many successful women executives, more than in Germany, but there’s also a huge mass of conservative women. Here, there aren’t as many successful career women but the general level of emancipation is higher.

“On TM3, we don’t have any extremely feminist shows; we haven’t invited the leading figures of German feminism to participate, though we respect them. But we also don’t have the lovers of (ultra-conservative) oompahpah-oompahpah ‘volksmusik.’ We’re trying to find a new generation.”

From the start, TM3 produced 30% of its own material, mainly talk and variety shows including “Frieda” and “Heart Attack,” but also a Doubek-hosted report show, “TM3 – Das Magazin,” the parents’ show “Kinderella,” and “Ultima,” a talk show featuring “provocative” subjects. TM3 also airs women-oriented shows, sitcoms, series and films from America and other countries, including an undubbed version of Oprah Winfrey.

“We also can’t please all the women all the time,” says Kroehne, “but we can reach certain target groups at certain times of the day – housewives in the morning, kids after school, part-time working women in the afternoon.

“In the early evening it’s a family channel. But the new thing is that it’s a women’s channel all day long. At any time, you’ll find something for some women.”

Cautionary tale

While a concept like TM3 has little precedent in the marketplace, it does have a cautionary example to steer clear of. Says Kroehne, “There’s a warning sign we carry around in the back of our heads – Vox. Are we too sophisticated, too intellectual?”

Vox was an ambitious but failed infotainment channel venture a few years ago that was formed by a consortium of news publications but didn’t find a mass audience.

“We need some of that intellectual quality because our audience expects it a little, but in the end, we have to attract advertisers to the program,” says Kroehne. “It’s a difficult balance.”

Before Kroehne can even begin to attract an audience, he needs the thing that is hardest to get in Germany today: a place on the cable networks. Though penetration now theoretically includes three German states – Bavaria, NRW and Hessen – with a total of 8.2 million homes, some of the nets are only partially accessible.

Some in NRW won’t open up for another month, and space in other regions may never open up.


Kroehne’s biggest enemy in the struggle for space on the overcrowded cable net are the regional public broadcasters.

“Okay, ARD and ZDF and Arte are necessary. And Bavarian Broadcasting is necessary in Bavaria. But is BR necessary in Hessen? Is Hessen Broadcasting necessary in Berlin?

“It’s like musical chairs – there are 10 chairs and 40 people. The media authorities are ranking stations for access to the nets according to the criterion of whether they add something to the variety of the market. Well, we think we’re different – we’re not a fourth music channel.”

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