The Bundeskartellamt, the German competition authority, has launched antitrust proceedings in the review of the online video platform proposed by German public broadcasters ARD and ZDF. According to the Bundeskartellamt, the initial merger control review has already been completed, removing the first regulatory hurdle in the service’s path; however the investigation determining whether the service is in breach of cartel rules must still take place.
ARD, comprising a collective of various German broadcasters, and ZDF submitted their plans to the Bundeskartellamt in October 2011. If given the go-ahead, the VoD platform will offer content from both broadcasters as well as programming from third parties. The platform, which has the working title ‘Germany’s Gold’, will be accessible to viewers via subscription, or free of charge with advertising.
With a combined viewing share of roughly 25 per cent, ARD and ZDF run some of Germany’s most popular channels; however restrictions on their exploitation of advertising leave ProSiebenSat.1 and RTL dominant in revenue terms, with IHS Screen Digest estimating their combined market share of the television advertising market at nearly 85 per cent. But while ARD and ZDF have progressed further than RTL and ProSiebenSat.1 did, the competition authority has yet to make a decision on whether or not the ARD/ZDF deal is in breach of a ban on cartels.
As public broadcasters, ARD and ZDF have different objectives and responsibilities when compared with commercial broadcasters; however the planned online video service would be a commercial venture. Both parties are hoping the VOD service will increase their revenues, using material from their extensive programme libraries. Critics have argued that such a move goes against their main aim – to provide independent and objective news, educational content and cultural material.
The initial investment required to get the service off the ground is reportedly substantial, much to the disapproval of European regulators who oppose using licence fee money for commercial ventures of this kind. ARD and ZDF will counter this argument if allowed to launch their platform, by operating it via their commercial subsidiaries WDR Mediagroup and ZDF Enterprises.