Interview with Thomas Rabe

”Bertelsmann is growing by its own strength again.“

Mr. Rabe, Bertelsmann is pursuing the four strategic goals of becoming a faster, more digital, more international and more diversified company. What progress did you make on this in 2017?

We again made significant progress. Our growth businesses – Fremantle Media, the digital activities of RTL Group and G+J, BMG, Arvato SCM, Arvato Financial Solutions and the Bertelsmann Education Group – collectively achieved organic growth of 5 percent in 2017. They now contribute about onethird of our total revenues. In 2011, it was 20 percent. So, we are improving by about two percentage points a year. In the medium term, the share these businesses contribute to our Group revenues should rise to 40 percent.

Meanwhile, we reduced the revenue share attributable to structurally declining businesses from 16 percent (2011) to around 4 percent. Overall, Bertelsmann's organic growth has improved steadily in recent years. Bertelsmann is growing by its own strength again.

What about the other goals?

The revenue share generated by our digital activities increased to 46 percent in 2017. Here, we’d like to get to over 50 percent in the coming years, so the target is already in sight.

We generated 27 percent of our revenues outside Europe last year, a 20 percent improvement over 2011.

And our structure with eight divisions demonstrates that we have become much more diversified. In the past few years, we’ve added new lines of business such as education. Since the shareholding increase in Penguin Random House to a three-quarters majority last October, we own majorities in all of our businesses: 75 percent of RTL Group and Penguin Random House, and 100 percent of all other divisions.

”Creativity is more important than ever in the age of digitization.”

You mention last year’s Penguin Random House transaction – how important is the book business for Bertelsmann?

The book business has been part of our company’s identity for more than 180 years. Bertelsmann has the most diversified creative offer of any company in the world – and the book business stands as a symbol for this. Penguin Random House publishes about 15,000 new books a year, and we have a large number of Nobel Prize winners and renowned authors on our roster such as Dan Brown, Margaret Atwood, Salman Rushdie and the Obamas.

How important is creativity in this age of data and algorithms?

I firmly believe that creativity is more important than ever in the age of digitization. Bertelsmann spends more than five billion euros a year on creative offers of all kinds, including videos, books, magazines, music and services. Simply put, creativity is the foundation of our businesses.

Digitization makes it possible to reach a global audience with our services. For example, the series “American Gods” from our subsidiary Fremantle Media has been broadcast on Amazon Prime in more than 200 countries. It is important that we expand our digital know-how, most recently through 15,000 scholarships for data analysis courses offered by the Udacity online education platform.

What do you think makes Bertelsmann's creative offering so special?

Its diversity and its reach. We deliver the full spectrum of media, services for business clients and educational offerings under a single umbrella. We reach more than one billion people worldwide every day. No other company offers that.

And what are the factors behind Bertelsmann’s success?

First and foremost, our corporate culture, and in particular, entrepreneurship and creativity, the strong local leadership of our businesses, our long-view approach and the relationships we have developed with creative professionals over the years.