The news that RTL Group is on the verge of buying the Bulgarian national commercial station bTV should come as no surprise.
The Bertelsmann-backed company is arguably less high profile in Central and Eastern Europe (CEE) than such players as CME and MTG. It is nevertheless already well established, with interests in Hungary (RTL Klub), Russia (Ren TV) and Croatia (RTL Televizija).
Hungary is undoubtedly RTL Group’s regional jewel in the crown, with the national commercial station RTL Klub the clear market leader. Indeed, although its audience share in the key 18-49 demographic in H1 2008 – according to interim results published by RTL Group – was, at 33.0%, 1.4 percentage points lower than in H1 2007, second placed TV2 only claimed 24.2%. Its Return on Sales (ROS) figure was also higher in H1 2008 (22.2%) than a year earlier (19.5%).
The going is undoubtedly much tougher in both Russia and Croatia. RTL Group was a relative latecomer in the Russian TV industry, securing a 30% stake in Ren TV in 2005. Ren TV operates in a market in which there is little movement amongst the leading stations, with Channel One and Rossiya the dominant players and NTV holding on to third place.
According to RTL Group, Ren TV’s all-day audience share amongst viewers aged 18-54 in H1 was, at 5.2%, unchanged on 12 months earlier. Moreover, its financials were far from impressive, with ROS halving from 10% to 5% over the period.
The Croatian market is meanwhile highly competitive, with RTL Televizija (27.0%) claiming a slight lead over both the public broadcaster’s first channel HTV1 (23.5%) and CME-backed Nova TV (23.0%) among viewers aged 18-49 in H1 2008. Yet while RTL Televizija also commanded the highest share of the net TV ad market (40.2% in H1 2008), its EBITA was negative.
Should RTL Group buy Bulgaria’s bTV, it will find itself operating in a small but highly competitive marketplace, going head-to-to-head with both CME and MTG. While it will have a head start – bTV is, after all, the clear market leader – the challenge will certainly be a tough one.
