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RTL plans €350M SVOD investment, targets 3 million subscribers

RTL Group has announced plans to invest about €350 million in subscription video-on-demand services in the next three years, with the aim of boosting its linear and streaming offerings.

"[W]e will focus on two clear priorities: building local streaming champions and strengthening our content creation," RTL CEO Bert Habets said in a statement along with its full-year earnings release. The executive also underscored that €300 million of its total planned investment "will be dedicated to content investments across all genres."

The Netherlands-based company has detailed its Total Video 2.0 strategy following the positive results it saw in its digital segment in 2018. For the full year 2018, RTL gained digital revenue of €985 million, a 19.2% increase from 2017. This space also accounts for about 15.1% of the company's total revenue.

RTL in 2018 captured a combined subscriber base of about 1 million for its TV Now Premium in Germany and Videoland in the Netherlands and now plans to launch similar streaming services in other markets, with the aim of reaching 3 million subscribers.

In 2018, RTL recorded 43.5% growth in TV Now Premium's paying subscribers, compared to 2017, while Videoland saw a 134.9% increase in 2018.

Habets also said RTL will continue its drama productions through content production unit Fremantle, which has reported an EBITDA of €147 million in 2018, representing a 5% increase from the year-ago period.

Fremantle plans to develop at least 35 scripted series, together with broadcasters and streaming platforms, which is anticipated to generate more than €500 million in revenue in 2021.

The company's investment plan is expected to "generate sizeable additional revenue" and have "limited impact" on the company's operating profit, Habets said.