×

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

Popular on Variety

More Digital

  • Black AF Netflix

    Everything Coming to Netflix in April

    As everyone continues to self-quarantine and practice social distancing due to the coronavirus pandemic, there’s no better “at-home” activity than catching up on all the new films and shows streaming on Netflix this April. A number of new series are set to premiere on the streaming platform, including “Never Have I Ever,” “#BlackAf,” “OuterBanks,” “The [...]

  • Illustration of the video streaming company

    Video Streaming to TVs Soared 85% in U.S. in First Three Weeks of March, Nielsen Says

    During the coronavirus pandemic, Americans are staying home — and, as you would expect, they’re streaming more than ever. U.S. consumers’ viewing of streaming has continued to increase through March. Over the first three weeks of March 2020, the total estimated number of minutes streamed to the TV was 400 billion, up 85% compared with [...]

  • HOOQ Demise Damages The Business Case

    Hooq May Have Fallen But a Business Case for Southeast Asian Streamers Endures

    With coronavirus lockdowns across the region causing a spike in stay-at-home viewing, Friday’s news that Southeast Asian video streamer Hooq is to close within a matter of days came as a shock to its friends and competitors alike. Compared with its regional rivals, Hooq had the most blue-chip backers in Singaporean telecoms giant Singtel, WarnerMedia [...]

  • U.K. Freelancers

    U.K. Government Faces Pressure From Industry on Economic Measures for Freelancers

    The U.K. government is facing increasing pressure from the creative industries after it emerged that economic measures set out for the self-employed last week by Chancellor of the Exchequer Rishi Sunak have yawning gaps in them. The measures may have come as a welcome move for many creative industries workers, but not all are eligible [...]

  • Howard Stern'America's Got Talent' Post-Show, New

    Howard Stern Announces SiriusXM Premier Will Be Free Through May 15

    Howard Stern announced Tuesday that SiriusXM Premier will be free through May 15 as a courtesy to those staying home in an effort to stop the spread of coronavirus. For the next month and a half, listeners will have access to more than 300 ad-free channels, including the Howard Stern Show. Sirius XM is also [...]

  • Lenny Abrahamson Series 'Normal People' Sets

    Oscar Nominee Lenny Abrahamson's 'Normal People' Sets BBC, Hulu Dates

    “Normal People,” a BBC and Hulu 12-part drama, will bow as a boxset on BBC Three in the U.K. on April 26, and will be released in the U.S. on April 29, it was revealed Tuesday. It will also air on BBC One, and RTE in Ireland, dates for which are yet to be confirmed. [...]

  • NewFronts 2020

    NewFronts 2020 Digital Marketing Series Postponed to June

    The 2020 Digital Content NewFronts are moving about two months later as live-streamed virtual presentations, with organizers citing the need for more time for participants to prep. Previously, the annual NewFronts had been scheduled for April 27-May 6 at various venues in New York City — but with the COVID-19 pandemic it became clear earlier [...]

More From Our Brands

Access exclusive content