Nearly two years after the initial service application was submitted (back in 2010), the online video service joint venture between RTL and ProSiebenSat.1 has finally been laid to rest.
The German state supreme court confirmed the decision of Germany's monopoly commission (Bundeskartellamt) regarding the ban of the potential joint venture between ProSiebenSat.1 and RTL. The Bundeskartellamt found that ProSiebenSat.1 and RTL would potentially have too dominant a position in the online ad-based TV market in Germany. Therefore, despite having relatively low individual shares in the online video market at present, the two broadcasters' efforts to build common online video service that was widely dubbed as the 'German Hulu' were turned down to prevent a potential duopoly.
The original plan was to build a common online video platform that would aggregate the content not only from RTL and ProSiebenSat.1's own TV networks, but also from third parties. The business model of the planned service was similar to what American service Hulu offers to its customers - ad-supported catch-up TV shows.
The final decision will be published in June 2012.
The decision of the court boosts the likelihood of Hulu itself using Germany as a launch-pad for further European expansion. The US video service has long been rumoured to be interested in the German market, and the stalling of a major online aggregator clears the way for it. Nonetheless, there are still several barriers that Hulu would have to address if it intends to launch in Germany:
1. Hulu, a joint venture between American broadcasters and content owners, launched its first international service in Japan in September 2011. According to IHS Screen Digest estimates, Hulu Japan did not see great consumer uptake, largely due to the modest amount of local content and lack of a compelling catch-up offer - the main driver of Hulu's success in the US.
2. In Japan customers can only access the ad-free version of Hulu Premium service, originally costing ¥1480 (about $18.20). In Germany, if Hulu remained with the same ad-free, subscription business model, the realities of the German online video market would likely see the venture meet with limited success. The online video market in Germany is dominated by consumption from ad-supported free-to-view online TV and UGC sites, driven by the traditionally value-conscious consumption culture in Germany. Premium pay TV services have never been hugely successful in Germany for the same reason.
For the German commercial broadcasters, failure to launch their own platform might bring up the question of collaborating with Hulu. After all, a deal with Hulu could address the same problems as the failed joint venture, keeping up with the high fragmentation across multiple devices, having a central portal to help improve consumer access and leverage the scale of the platform to improve advertising sales. In the age when digital consumption is actively entering the living room via connected TVs, Blu-ray players, consoles, STBs, maintaining common and coherent advertising campaigns across multiple devices is vital because it affects not only reach but, most importantly, monetisation. However, with HbbTV becoming the de facto standard for many connected devices, a single aggregator may no longer be necessary - a device which meets the HbbTV standard will act as an aggregator and single point of consumption.