Please wait...
Please wait...

RTL’s Videoland of opportunity

The arrival of Netflix in the Netherlands prompted RTL Nederland to buy into Videoland. MD of digital Arno Otto tells Richard Middleton about plans for the new acquisition.

Arno Otto

Arno Otto

Videoland’s history must surely be one of the more unusual amongst the plethora of VoD services in the world. From its humble and very physical beginnings as an old fashioned video store in 1984, it transformed into a VoD website in 2007 and was recently the subject of a takeover by RTL Nederland, part of broadcasting giant RTL Group.

RTL acquired a 65% stake in Videoland holding company The Entertainment Group in August just as Netflix was aiming its own big guns directly at Dutch soil. The country became the 41st territory of operation for the US-based firm in September, and the Netherlands is now a VoD battleground as never before as the two firms spar for subscriptions. Netflix recently secured exclusive rights to all Disney animation and live-action movies in the territory from next year.

But Videoland has a head-start and currently offers around 4,000 movies, but an imminent shift in its business model will see that grow to 15,000 titles, alongside a host of RTL’s own content from TV. That shift, as RTL Nederland’s MD of digital Arno Otto explains, will see the previously pay-per-view model turned on its head in favour of a Netflix-style monthly fee.

Otto adds: “The focus is on the design of an ‘all-you-can-eat’ subscription model that’s part of RTL’s transition, where we go from advertising to subscription revenues.”

While Netflix is charging €7.99 (US$10.50) per month, Videoland will price its subscription VoD deal at €10. Aside from Videoland’s sister site MovieMax, Otto says that the race for VoD dominance, at least at the moment, is a two-horse race. “Netflix is the international competitor,” he adds. “Locally there’s no comparable offering yet in the market.”

While Videoland is currently one of the Netherlands’ most popular VoD services, there are other arguably more niche products making their own play for audiences. Ximon offers local TV shows such as Dicte and Shouf Shouf and charges €4.95 per film or €9.50 for a monthly subscription, while SBS Broadcasting’s Veamer offers an array of programming from SBS6 and Net5. Much of it is free to access, but it also offers pay-per-view deals on Dutch-language shows like Dokter Tinus for 99¢, in addition to movies that cost €4.99.

Sonny Boy

Sonny Boy

Meanwhile, at Netflix HQ, the company is planning to tempt viewers away from such deals by once again rolling out its big shows, such as House of Cards, Hemlock Grove and Orange is the New Black. But Otto is hoping that Videoland can provide a more localised offering that will include films, TV series and self-produced content.

“Next to the common international films and series offering, we will differentiate ourselves with high-quality local signature content, to which we have exclusive rights,” he adds.

Netflix, of course, has similar plans, having already signed up Dutch content like Sonny Boy and All Stars 2: Old Stars. All of this means it seems likely that the real battle will be fought on two fronts: content acquisition and marketing.

Regarding the latter, Reed Hastings, Netflix’s co-founder and CEO, has already made his first attempts to position his service at the top of the VoD tree. The Dutch public, he said, would for the first time be able to “take full advantage of their fast broadband connections” following the arrival of his service.

Otto, meanwhile, says his biggest challenge will be to reposition the brand away from the rental model. “So next to content, marketing will be key,” he says.

Indeed, the arrival of Netflix seems, if nothing else, to have driven on-demand providers in the country away from pay-per-view deals to more subscription-led offers. With Videoland following Netflix’s approach, it remains to be seen how subscribers will react, but Otto says he wants to establish his service as the country’s market leader. “That means several hundred thousand subscribers, over time,” he says.

The next step for Otto is introducing new content to Videoland, to join the array of films already available. “We’ll phase our offer to prevent subscribers from quickly dropping and only returning when the next series will be available,” he adds. “We want to ensure new content every month.”

Ultimately, that will be the key to long-term success. Persuading the Dutch public to adopt a subscription model will be necessary for all the vying parties if they want to succeed, but it is in the content element of the package where Otto shows his confidence in RTL’s recent purchase.

“An ‘all you can eat’ film package combined with unique local content in a growth market creates real subscription value,” he says.

Please wait...