RTL Group buys 51% stake in BroadbandTV

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Luxembourg-based European entertainment network RTL Group has formed a strategic partnership with BroadbandTV which sees RTL making an initial investment of €27 million ($36.7 million) to take a 51% stake in the Vancouver-based online video company.

The investment, announced Wednesday, is part of a planned series of purchases of stakes in BroadbandTV, which is led by founder and CEO Shahrzad Rafati. The partnership is touted as creating a new platform in RTL’s digital strategy and allows BroadbandTV to accelerate its global growth strategy.

As part of the deal, RTL, which owns content powerhouse FremantleMedia, will appoint three people to sit on the board of BroadbandTV.

The two companies will jointly explore opportunities in areas such as development of original content and advertising sales with an eye on the online video market.

First founded in 2005, BroadbandTV uses a proprietary technology to help large media organizations to benefit from the uploading of their content on YouTube. It also offers various tools for the management, optimisation, protection and monetisation of video content.

BroadbandTV has more than 7,800 independent channel partners through its network brands VISO and TGN The number of video views to BroadbandTV sites grew by 169 per cent year-on-year, reaching 2.1 billion views in the first quarter of 2013 alone, according to a joint-company statement.

Guillaume de Posch, Co-CEO of RTL, said in the statement: “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. Our major broadcasters have built leading catch-up TV services, while RTL Group’s global content arm, FremantleMedia, has become the highest-rated TV producer on YouTube, with 135 channels currently generating 400 million video views per month. Today, we are delighted to announce a partnership with BroadbandTV and Shahrzad Rafati that will further our development. Broadband TV 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.”

Rafati added: “BroadbandTV has been on a rapid growth trajectory since we began, and that pace will only accelerate with our partnership with RTL Group. We are thrilled to have the powerful resources of RTL Group behind us. In addition to the competitive advantage for BroadbandTV, our customers and partners will benefit greatly from RTL Group’s global reach, advertising sales and expertise in producing amazing content. Our skill sets are complementary and we share mutual goals. 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. Above all, what inspires me about this new partnership is that, even more than ever, it will enable content owners and creators across the globe to achieve their ambitious goals, which is one of the key reasons for BroadbandTV’s existence.”