RTL German carriage deal sends signal to public broadcasters

By
Jonathan Broughton

June 27, 2012

Germany's Kabel Deutschland (KD) has agreed a carriage deal with RTL for its free-to-air channels, pay TV channels and VOD content, sending a signal to ZDF and ARD over the public broadcasters' on-going dispute with the cable group over carriage. Both ZDF and ARD have recently sent cancellation notices to KD, which will result in all of the pair's channels dropping off cable by the end of 2012. The move is the latest in an increasingly bitter dispute over the fees the public broadcasters pay for analogue carriage on German cable.

Kabel Deutschland will carry channels RTL HD, Vox HD, Super RTL HD and RTL 2 HD which will be added to KD's HD package reaching an estimated 460,000 homes. Pay channel RTL Living will also be carried as part of KD's premium extra package which will reach an estimated 570,000 subscribers. Free channel RTL Nitro will be added to KD's selection of RTL channels as of July 2012.

The deal with RTL comes immediately on the tail of ZDF and ARD saying they will remove their channels from cable at year end and can be considered a shot across the bows of the public broadcasters. Both Kabel Deutschland and RTL are keeping quiet about exact terms of the deal, but Screen Digest has learned that the new agreement will continue along much the same lines as before. RTL will pay for carriage for its analogue feeds, whist getting a carriage fee for its premium digital and HD channels offerings.

HD channels will be carried immediately in KD's primary HD package, alongsideZDF and ARD channels, Arte HD, Das Erste HD and ZDF HD. If the public broadcaster's channels are not carried after the end of 2012, the RTL channels are well placed to receive additional viewing share from the more concentrated HD subscriber base.

ZDF and ARD, long term partners of KD are unhappy at on-goingfees for the carriage of channels in analogue. The German cable market has gradually evolved towards a more commercial model but is still some way behind markets where channels habitually receive an affiliate fee for being on the cable platform. As digital roll-out continues, German cable operators will have to increasingly absorb these costs, shifting the business model away from a utility service provision for transmission and more and more towards a traditional pay television model. The issue is further complicated because the public broadcasters main channels have must-carry status on cable. What happens in this situation if the channels pull the plug remains to be seen. KD and the channels now find themselves in an interesting Mexican stand-off: the impact on the cable operator of not having the main public channels will also be significant. Only one thing seems sure: further developments are inevitable.

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