RTL puts BroadbandTV on the block

RTL Group has decided not to buy out BroadbandTV, the Canadian YouTube channels business in which it took a multimillion-dollar stake four years ago, and is instead exploring “strategic alternatives” for the firm.

The European broadcast giant paid €27m (US$36m) for a 51% stake in the Vancouver-based multi-channel network (MCN) in June 2013 as part of a series of investments in the online space, which included stakes in StyleHaul Network and SpotXchange.

But yesterday Bertelsmann-owned RTL, which in turn owns production giant FremantleMedia, said it would explore strategic alternatives for the firm with the minority shareholders of BroadbandTV. These options could include a sale of the company, additional outside investors or an initial public offering.

Both parties have enlisted investment bank LionTree to lead the process.

Ad-funded BroadbandTV was set up in 2005 by Shahrzad Rafati and works with content creators of all sizes, from independent video entrepreneurs such as Element Animation to established media brands like Discovery Communications.

The firm, which claims 22 billion online views per month, has a hip-hop-focused Opposition network and offers video networks for gaming (TGN), electronic dance music (Wimsic) and lifestyle (Kandesa).

In April 2015 the MCN – which employs around 400 people – acquired Indian children’s producer and channels operator YoBoHo. YoBoHo operates 27 YouTube channels, including HooplaKidz, and offers more than 8,000 children’s shows, which it says generate three billion views per year.

The MCN space saw a flurry of investment a few years ago, with the high point being Disney’s US$500m purchase of Maker Studios in 2014. A further US$450m in performance-related earn-outs was also due but Disney is thought only to have paid around half that.