Bertelsmann in the digital era

By Alfred Bouchaud

Bertelsmann is a German group headquartered in G├╝tersloh, North Rhine-Westphalia, and is one of the world’s largest media companies with a turnover reaching 17,2 billion euros in 2017. It is a family-controlled corporation as the Monh family is the main shareholder. It owns famous companies such as the Luxembourgish RTL Group specialised in the TV and radio sector, the American publishing house Penguin Random House and the Berlin based music company BMG.

In 2009, Bertelsmann posted bad financial results with a loss of 142 million euros, showing the devastating effects of the 2008 crisis which affected all the media sectors and caused the collapse of the advertising markets.

However, over the past few years, the group has been boasting excellent results which enabled it to invest massively in digital businesses such as Relias Learning, a US online healthcare education company, and the e-learning corporation Hotchalk. Bertelsmann and Morocco’s Saham Group also decided to combine their worlwide Customer Relationship Management businesses on January 2019 to create Majorel, a Luxembourg-based company employing about 48,000 people in 28 countries. Indeed, according to Bertelsmann CEO Thomas Rabe, content moderation is a growing business, in particular in the wake of a German law, which came into force on 1st January 2018, stating that social media companies including Facebook and Twitter must remove hate speech posts or face fine up to 50 million euros. Thus, Thomas Rabes’ strategy consists in transforming Arvato, Bertelsmann’s arm which used to deal with CRM, into a larger entity able to better address new challenges such as hate speech contents on social media.

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