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RTL Buys Into YouTube Business

European broadcast giant RTL Group invests $36 million into Vancouver-based online video company BroadbandTV, part of a planned series of investments in the firm.

European broadcast giant RTL Group is putting $36 million into Vancouver-based online video company BroadbandTV – part of a planned series of investments in the firm, according to a report by C21.

RTL has been circling a number of YouTube channel management specialists, or multi-channel content networks (MCN) as they’ve become known, and has already put money into StyleHaul Network, following an earlier investment by majority owner Bertelsmann.

The BroadbandTV deal is the company’s biggest stake in the MCN sector to date, however, and gives the newly minted parent of FremantleMedia, a 51 percent controlling share in the business.

BroadbandTV is YouTube’s fifth largest MCN, ranked behind the likes of Fullscreen, Maker Studios, Machinima and Vevo. The firm manages more than 7,800 channels and generates around 800 million video views per month.

It was set up in 2005 and works with content creators of all sizes, from independent video entrepreneurs such as Element Animation to established media brands like Discovery Communications. The number of video views via BroadbandTV properties grew 169 percent year-on-year, reaching 2.1 billion views in the first quarter of 2013 alone, according to RTL.

“As the leading European entertainment network, RTL Group is committed to becoming a major player in all segments of the rapidly growing online video market, and is ideally positioned to do so,” said company co-CEO Guillaume de Posch.

When RTL released its 2012 financial results earlier this year, it trumpeted subsidiary FremantleMedia’s success on YouTube, claiming the American Idol, X Factor and Got Talent co-producer registered 4.5 billion views across over 100 channels, making it the “highest rated TV producer” on the platform.

De Posch updated these figures today, saying the firm now runs 135 channels, generating 400 million video views per month.

“BroandbandTV is one of the most innovative companies in the YouTube ecosystem. 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,” de Posch added.

BroadbandTV founder and CEO Shahrzad Rafati said: “Together we have defined an ambitious growth plan fuelled by investments in technology, advertising sales, content, international expansion and talent. We have a shared vision to achieve market leadership in the digital space.”

The deal is the latest in a flurry of M&A activity in the MCN space.

Earlier this month, Fullscreen confirmed a a first funding round, reportedly worth US$30m and involving parties including The Chernin Group, while Maker Studios – which raised a similar amount in a third round last year – has seen former Endemol chief Ynon Kreiz recently take over the reins. Machinima is now said to be seeking another significant chunk of cash.

Jennifer Wolfe's picture

Jennifer Wolfe is Director of News & Content at Animation World Network.