The Higher Regional Court in Dusseldorf has backed an earlier decision by the German state supreme court in regards to the ban of the potential joint venture from RTL and ProSiebenSat.1 (See 'RTL/ProSiebenSat.1 joint online video service ban is confirmed by German court' update from 25 April 2012).
Dusseldorf's court ruled out that the potential joint venture by two leading private broadcasters that was supposed to become the 'German Hulu' would have enjoyed a dominant anti-competitive position in the online TV advertising market due to their extensive proposed library of titles and their existing market share in traditional TV. According to the court, RTL and ProSiebenSat.1 have a stable market share of close to 90 per cent of the broadcast advertising market according to IHS Screen Digest estimates, while competitors such as ARD and ZDF only accounted for under 7 per cent of the TV advertising market.
ProSiebenSat.1 and RTL have responded indicating that they would review the court's ruling before taking the appeal to a higher level - the Federal Court of Justice, Germany's Supreme Court.
While the Federal Cartel Office sees the court decision as positive, noting that it would send a signal prioritising the protection of competition in new media, RTL and ProSieben's attitude towards the decision is unsurprisingly contrary. The broadcasters see the lack of development of a strong local player as a threat to the local German media industry, as international players will not take long to penetrate the market. Speculations on Netflix seeking new European markets or Hulu's international expansion to Germany that circulate in the industry are playing their part in lending weight to RTL/ProSiebenSat.1's appeal.
Meanwhile, the proposed joint venture between ARD and ZDF, dubbed 'Germany's Gold' has yet to see a decision from the courts. The plan from ARD and ZDF is to create a VOD service based on pay-per-view, subscription and advertising business models that will offer German TV and movie content from 17 domestic partners as well as international players. The decision on the ARD/ZDF plans is to be announced later this summer but since the 'Germany's Gold' participants have only a very small part of the advertising market, the prospects for ARD and ZDF look significantly less gloomy.