Thomas Rabe was born in tiny Luxembourg, the mini nation sandwiched between France, Germany and Belgium. But when it comes to business, as CEO of pan-European broadcasting giant RTL Group and chairman and CEO of RTL parent company, global media conglomerate Bertelsmann, Rabe likes to keep it big.
At an RTL shareholder meeting in August 2021, Rabe dropped a bombshell: Fremantle, RTL’s production division, which makes entertainment formats such as x factor And american idol and already one of the largest independent TV producers in the world, was about to get much bigger. Rabe said Fremantle would increase revenue by as much as €1 billion ($1.1 billion) within four years to meet a new revenue target of €3 billion ($3.3 billion) by 2025.
RTL gave Fremantle the money to invest in M&A expansion, fueling a buying spree that has seen the company spend more than a quarter of a billion dollars over the past three years acquiring independent companies, including Ireland’s Element Pictures, producers by Normal people and Oscar winner The favorite; The Italian Lux Vide, producers of Netflix Medicior Abot Hameiri, the Israeli group behind Hit Schtisel. And much, much more.
This urge took Fremantle out of its comfort zone of unscripted entertainment and into the riskier business of drama and script production, including independent films, with the guidance of productions by the likes of Pablo Sorrentino (The hand of God), Luca Guadangino (Bones and everything) and Yorgos Lanthimos (Poor things). As well as documentaries: Last year Fremantle took a majority stake in 72 Films, producers of BBC documentary series The Elon Musk Showand Wildstar Films, which produce National Geographic films US National Parks.
It also transformed Fremantle into a global drama giant, earning the company the first honor to be mentioned The Hollywood reporter‘s International Producer of the Year 2023.
In an email interview with THRRabe explains why RTL is still betting big on Fremantle, how drama fits into the company’s global strategy and what indie film and american idol. “Premium content and storytelling are at the heart of Fremantle.”
You are investing heavily in expanding Fremantle’s business and have very ambitious goals for the division: a revenue target of €3 billion by 2025. What is behind this strategy of doubling film and TV content production at this time ?
Content is the lifeblood of RTL Group, as it stimulates audiences in broadcasting and streaming. We spend more than 2 billion euros ($2.16 billion) on content every year, in addition to Fremantle productions. Fremantle is one of the world’s largest creators, producers and distributors of scripted and unscripted content. Our goal to reach a turnover of 3 billion euros by 2025 is ambitious. To achieve this, we want to invest in entertainment, drama, film and documentaries – both organically and through acquisitions.
Last year, Fremantle completed eight acquisitions, including Italian fiction producer Lux Vide, film and drama production company Element Pictures and documentary producers 72 Films and Wildstar Films. In addition to acquisitions, partnering with world-class storytellers and international talent is key to Fremantle’s success. Over the past two years, Fremantle has signed agreements with Angelina Jolie, Michael Winterbottom, Richard Brown and Edward Berger.
As a result, Fremantle’s turnover grew by 22 percent last year to more than 2.3 billion euros ($2.5 billion) – a record level and a big step towards the 3 billion euros mark.
What role do you see Fremantle playing compared to the ‘national media champions’ approach to RTL’s streaming and broadcasting business?
Expanding our global Fremantle content business and our national streaming services are key to our growth strategy. Fremantle’s expansion into scripted has helped establish partnerships with streamers around the world, which will account for more than 15 percent of Fremantle’s revenue by 2022. To replicate this success in documentaries, Fremantle created a new global documentary division, acquired documentary production companies and created its own premium documentary label: Undeniable.
Importantly, Fremantle’s entertainment formats continue to be successful. For example, Fremantle will format in the first half of 2023 America has talent And american idol significantly outperformed the primetime averages of the respective US TV networks. In Britain, Fremantle produces the country’s two main entertainment shows: The intern And Britain has talent. And in Germany, Fremantle’s production company UFA produces successful formats for RTL Deutschland’s linear TV channels, such as the long-running talent show Germany is the Superstar.
Overall, Fremantle has become an even stronger, more creative and diverse global content powerhouse in recent years – both in terms of geographic footprint and output in entertainment, drama & film and documentaries.
In addition to its core business of unscripted television, Fremantle has expanded its drama, documentary and even film production. What is the strategic appeal of these typically lower margin, higher risk companies – independent films in particular – to Fremantle?
Premium content and storytelling are at the heart of Fremantle – be it entertainment, drama or documentaries. In 2022, Fremantle generated 35 percent of its total revenue from drama and film productions, with adequate returns.
Fremantle’s drama and film productions have won multiple awards. In the past two years The hand of God was nominated for an Oscar, Bones and everything won two awards at the 2022 Venice Film Festival, and The Eight Mountains was awarded at the Festival de Cannes 2022. Fremantle has five titles in competition at the Venice Film Festival this year.
Remarkable examples can be found in documentaries Arctic Driftwhich has won multiple awards and will return with a sequel before the end of the year, and Shadow of the truth (from the Israeli label Silvio Productions), which has been acquired by Netflix and has just aired on the BBC in the UK.
Scripted is arguably more risky and capital intensive. But it’s essential to partner with top creatives, expand the relationship with streamers around the world, and create library value.