The Bundeskartellamt, Germany’s antitrust authority, has today cleared the formation of an advertising joint venture (JV) between RTL2 and Warner Bros. Discovery (WBD). The JV is designed to jointly market TV advertising space offered by the two broadcasters.
The approval marks a change in tone from a major part of the European regulatory community. Mergers and JVs between broadcasters have been notoriously tough to achieve due to the impact that combining their shares of the audiovisual ad market would have on competition. But as the market has expanded to include the ad-supported streaming and video businesses of global tech giants, broadcasters have become smaller fish in a much larger pond.
The Changing Market
RTL2 is a German TV network jointly owned by RTL Group, Bauer Media Group, Disney’s Tele-München Gruppe and Hubert Burda Media. It operates an ad-funded TV channel of the same name, and makes its content available on various streaming services, most notably the AVOD service RTL+. Until now the company has marketed its inventory through its ad sales subsidiary, El Cartel Media.
WBD meanwhile operates several free TV channels in Germany, including DMAX, TLC, Tele5 and Eurosport 1, as well as pay-TV channels, such as Discovery Channel, Warner TV Film, Cartoonito and Eurosport 2. The company also distributes film, home entertainment and video games in the country, and sells most of its advertising space itself.
Following its review of the proposed combination of the two advertising businesses, the Bundeskartellamt found that El Cartel Media and WBD are “far behind the advertising marketers of the leading broadcasting groups RTL and ProSiebenSat.1, which still account for the majority of sales.”
At the same time, the entry of Netflix, Amazon Prime Video and Disney in the German video advertising market means their ad-supported streaming offerings should also be included in a fair assessment of the market under consideration, according to the antitrust authority. The watchdog added that YouTube “also has some advertising space that can be considered comparable”, as the Google-owned service increases its volume of long-form, TV-like content.
“In view of this, the cooperation project between RTL2 and Warner Bros. Discovery could be cleared,” the regulator said in its ruling.
Enter the Streaming Giants
The decision is significant following a series of blocked collaboration efforts in Germany. In December 2024, the authority rejected a proposal for RTL Group to sell ad space for RTL2, because it would only cover linear TV sales, where the broadcasters still controlled most of the market. The Bundeskartellamt ruled that “while new players such as Netflix, Amazon Prime or Disney are entering this field, their advertising activities so far are not important enough to exert considerable pressure on the placing of advertisements in linear TV.”
And in September 2024, the regulator blocked an attempted merger between two children’s channels, RTL’s Super RTL and Paramount’s Nickolodeon. Again the market under consideration (in this case the children’s advertising market) did not include significant participation and competition from the US tech firms, according to the watchdog, which argued there are “only a very limited number of companies” offering ad space specifically aimed at children. “Although we are seeing a strong shift away from linear television, especially also among children, streaming services such as Netflix or Amazon currently do not play a role in the children’s advertising market,” said the Bundeskartellamt.
But the larger size of the market in which RTL2 and WBD operate – and their relatively small share of that market – prompted the watchdog to greenlight the JV. The ruling acknowledged that the market conditions preventing previous collaboration attempts no longer applied, explicitly because the market has expanded to include Netflix, Amazon, Disney and parts of YouTube.
“The television landscape is changing, and companies are increasingly interested in cooperation in order to hold their ground amid growing competition from international players,” said Andreas Mundt, President of the Bundeskartellamt. “Although the conditions in the market have so far prevented closer links between competitors in previous cases examined, there are no grounds for prohibiting the cooperation project between RTL2 and Warner Bros. Discovery under merger control rules. As this project just involves smaller providers in the market, it is likely to even have a positive effect on competition. In this context, we no longer consider the market to be limited to TV advertising; we rather see it as a big-screen advertising market that includes TV advertising, but also, and in particular, the offerings provided by Netflix, Amazon Prime, Disney and, to a certain extent, also YouTube.”
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