While television viewing rates decreases in the Netherlands and the number of on-demand viewers increases rapidly, RTL The Netherlands (RTL for short) tries to stay competitive in the battlefield of the Dutch television.
With the entry of Netflix in the on-demand markets, most TV broadcasters see a decrease in viewing rates. This leads to a decrease of advertisement revenues and could lead, in a worst case, to an exit of the TV broadcasting market. At the moment, 1.5 million people in this country have a Netflix account and so contribute to Netflix’s increasing revenues and market share. While speculators agree that Netflix is market leader in the online movie and series rental industry, RTL tries to beat the competition.
RTL has made plans to stay competitive in this shifting market. RTL’s idea was to make a digital video streaming platform. This platform enables visitors to watch RTL’s own content. Think in this case about series RTL like Baantjer and Gooische Vrouwen. Besides these series, the platform enables you the watch RTL’s programs which you probably missed on live television. And additionally, RTL will buy externally produced movies to increase the content to the platform. Most of RTL’s content are Dutch productions and these are mainly focused on the Dutch market. For now, if you would like to watch a series or program you will pay a fee of €0,99 to €3,99 for each episode.
If we compare this to Netflix, which offers series and movies (own productions and bought content) which are available to you for a fixed amount of €7,99 up to €11,99 per month (depending on the number of devices). Besides this, Netflix is focused more internationally. They will reach a broader audience and are, in this way, able to make a greater revenue. This enables them to be more flexible in their spending. Investments in one country can be financed by profit from another country.
In my opinion, RTL tries to compete with Netflix, but focuses on a different niche market by providing different content. I think RTL is making a great step forward in surviving in this rapid changing market. The only side note I would like to point out is about RTL’s revenue model. Netflix offers content for a fixed amount a month and enables you to watch as much as you want. RTL, on the other hand, asks you to pay for each episode. By paying for each episode, the account would feel much more expensive to me which could force me to watch large numbers of videos.
How you think about this? Is broadcaster RTL able to compete with video streamer Netflix? Does RTL need to keep certain things in mind, like the revenue model which could force people to enter RTL’s platform?
Source: https://www.techzine.nl/nieuws/75554/rtl-gaat-concurrentie-aan-met-netflix.html
Source: http://www.telecompaper.com/nieuws/bijna-een-vijfde-nl-huishoudens-heeft-netflix-abonnement–1139147
Source: https://www.nrc.nl/nieuws/2013/08/08/rtl-wil-voorsprong-nemen-op-netflix-1281086-a318343
Hi Tom,
Thanks for you article! I think you’re right about the RTL’s revenue model. People will have the idea that they will pay more when they have to pay for each episode they watch. Netflix’s revenue model is in my opinion much better, since you don’t have to think about how much money you will spend on Netflix, cause it’s fixed.
However, I don’t think RTL is losing this battle in a fast way. They have to try not to compete with a company like Netflix and have to focus on other customers. At the moment there are enough (older) dutch people who like RTL for what it is. Staying focused on good dutch tv series and programs will make RTL popular. I think Netflix doesn’t want to compete in the Dutch market that hard. When RTL is focussing on very good (dutch) series and tv programs and pay for exclusive rights to broadcast them, Netflix will stay away for a while.
In the long run I think Netflix will grow significantly and become (already is) a great company where RTL can not compete with. But for this time, RTL is not yet been beaten from the field.
Wessel