German broadcasters RTL and ProSieben saw their plans to create a local one-stop online video destination site that resembles a German version of Hulu rejected by the country’s federal cartel office over anti-competitive concerns, according to multiple reports. The regulator argued that the two companies dominate too much of the TV advertising market, and the proposed joint venture would simply move their duopoly online. The German broadcasters have said they will appeal the decision and take the case to the courts — but given the ambivalence that big U.S. broadcasters now have about the monster they created with Hulu, maybe the German cartel office’s decision is actually a good thing for RTL and ProSieben?
The two German broadcasters first announced plans for the online video destination site last August, modeling it after the BBC’s immensely popular iPlayer catchup service. Like the iPlayer, viewers would have up to seven days after a show aired to watch it online.
While RTL and ProSieben would jointly own and operate the technological infrastructure and delivery platform, they would make the site open to other public and private broadcasters to sign up if they wanted to. According to the Hollywood Reporter, RTL and ProSieben even said they would allow any additional content partners to control what content is available through the proposed service, and allow their content partners to sell their own advertising.
That last bit didn’t allay concerns from the cartel office, which ruled that the venture would have too much control over advertising in the burgeoning online video market. The Hollywood Reporter notes that RTL and ProSieben networks control about 75 percent of German TV advertising. The German regulator wanted the proposed platform to be open to all online video providers, but the broadcasters argued that would devalue the site’s content.
For now, RTL and ProSieben said they would appeal the decision in court, but the decision is certainly a setback for the companies’ online ambitions. However, given recent anxiety that Hulu’s broadcast parents and content partners have shown about the U.S. video aggregator’s effect on their linear broadcast businesses, RTL and ProSieben might actually be better off without launching a Hulu clone. In the U.S., Hulu has been hugely successful, due in part to the strength of content available. But at the same time, its success has caused some content partners to reconsider their backing of the site, as they see more audiences turn to the online provider for their content rather than watching shows live on TV.