×

RTL Takes Control of BroadbandTV with $36 Million Investment

Media conglom, which owns FremantleMedia, plans series of investments in YouTube multichannel network company

European entertainment conglom RTL Group, which owns FremantleMedia, has invested an initial $36 million in online video company BroadbandTV giving it a 51% stake in the YouTube multichannel network.

The deal marks the latest in a flurry of investments by large media companies into YouTube MCNs. Other recent pacts of note include funding in Fullscreen by Chernin Group, Comcast Ventures and WPP; a Time Warner-led $36 million round in Maker Studios late last year; and Bertlesmann’s $6.5 million funding in StyleHaul.

BroadbandTV, founded in 2005, works with more than 7,800 independent channel partners and media companies such as Discovery Communications. In the first quarter of 2013, the number of video views on BroadbandTV’s sites grew 169% reaching 2.1 billion.

RTL’s funding is the first in a series of investments in BroadbandTV, which will remain based in Vancouver, Canada, and run as a standalone entity. Shahrzad Rafati, founder and CEO of BroadbandTV, said RTL brings a range of resources to her company, including content expertise and libraries, as well as advertising sales and operational infrastructure.

“We have an ambitious growth plan with RTL,” Rafati said. She declined to disclose the valuation of BroadbandTV. Startup raised a small angel round in 2007 and has been profitable since 2009, Rafati said.

BroadbandTV has 51 full-time employees, with about another 100 contractors around the world. With the RTL funding, the company plans to increase headcount in Vancouver and open U.S. offices, in L.A. and San Francisco, as well as a European office that will likely be in Berlin.

Following the transaction, RTL Group will appoint three members to BroadbandTV’s board. The duo said they will explore joint business opportunities in areas such as development of original content and advertising sales.

BroandbandTV “is one of the most innovative companies in the YouTube ecosystem,” Guillaume de Posch, co-CEO of RTL Group, said in a statement. “RTL Group’s track record of allowing our businesses to be run autonomously by entrepreneurs means that BroadbandTV can maintain its culture and flexibility, while benefitting from our strong investment and partnership to drive continued growth.”

Luxembourg-based RTL Group owns interests in 53 TV channels and 28 radio stations in 10 countries. FremantleMedia, its content production arm, is itself a major YouTube multichannel network provider with 135 channels currently generating 400 million video views per month.

BroadbandTV generates revenue from ads sold in its YouTube channels. Rafati would not specify what her company’s revenue-sharing agreement with YouTube is. But she said YouTube’s typical split — under which content partners receive 55% of ad revenue, and YouTube taking 45% — was established several years back, “and the model was maybe applicable five or six years ago,” she said. With the costs of bandwidth and video hosting falling, it’s “maybe not something we should have in this day and age.”

For BroadbandTV, the strategy is to sell ads via its own reps to secure higher ad rates (cost per thousand impressions, or CPM) than YouTube can. Noted Rafati, “55% of 20 bucks is very different than 55% of 8 bucks.”

SEE ALSO: Fullscreen, With Comcast and WPP Backing, to Expand Into Studio Model

More Digital

  • How Netflix Uses Technology: A Look

    How Netflix Wants to Take on Its Competition in 2019 and Beyond

    “They’re going to do some great shows. I’m going to be envious.” Netflix CEO Reed Hastings practiced humility when he was asked about new competitors like Disney’s and Apple’s upcoming streaming services this week. “These are amazing, large, well-funded companies with very significant efforts,” he said. “But you do your best job when you have [...]

  • AVOD streaming video OTT users -

    Comcast Unveils 'Flex,' a Streaming Service for Internet Customers

    Comcast said it would unveil “Flex,” a hub for its Internet-only customers that allows them to stream and purchase shows and movies, the latest effort by a traditional cable provider to latch on to customers who are migrating to broadband services, The Philadelphia cable giant will also make free, ad-supported services available via the service, [...]

  • splice

    Splice Raises $57.5 Million in Latest Funding Round

    Splice, a favorite of music creators that allows access to a library of three million rights-cleared sounds, announced today that the company closed a Series C funding round at $57.5 million. That brings Splice’s total amount raised to roughly $102 million since its launch in 2013. It raised a Series B in November of 2017. [...]

  • Facebook's 'Red Table Talk' Garners Daytime

    Facebook's 'Red Table Talk' Garners Daytime Emmy Nomination

    Facebook is now in the awards hunt: Its popular original series “Red Table Talk” hosted by Jada Pinkett Smith was nominated for a 2019 Daytime Emmy. It appears to be the first-ever Daytime Emmy Awards nomination for a Facebook-funded show, although a company rep was unable to confirm that. “Red Table Talk” is nominated in [...]

  • MLB-TV

    MLB.TV Joins Lineup on Amazon's Prime Video Channels

    Amazon has launched MLB.TV on Prime Video Channels for Prime members in the U.S., just in time for the start of Major League Baseball’s 2019 regular season start next week. The MLB.TV package provides regular-season out-of-market baseball games, both live and on-demand. Prime members in the U.S. can subscribe to MLB.TV for $24.99 per month, [...]

  • Tencent Music Shares Drop Despite Solid

    Tencent Music Shares Drop Despite Solid First Earnings Report

    Proving that good is not always good enough, Tencent Music Entertainment shares fell 9 percent after the Chinese company released its 2018 earnings, wiping out $2.7 billion in market capitalization of what is arguably the biggest audio music service in the world. Chalk it up to big expectations and a short track record: Wednesday’s earnings [...]

  • PewDiePie - YouTube

    PewDiePie vs. T-Series: YouTube Channels Keep Battling for No. 1 Spot

    UPDATED, 3/21: The back-and-forth competition for YouTube’s No. 1 spot continues. T-Series on Thursday again pulled ahead of YouTube’s PewDiePie as the No. 1 most-subscribed channel on the platform — but again the vlogger-gamer-comedian fans’ rallied behind him to retake the position. In a months-long symbolic running battle for the title, PewDiePie and his fans have [...]

More From Our Brands

Access exclusive content