Fremantle fuels record RTL revenue as M&A spending spree set to continue

The Responder

Fremantle’s M&A spending spree is showing little sign of slowing down, with parent RTL Group confirming that it would be “investing significantly” in the production & distribution arm, which reported a 21% rise in revenue for 2022.

Fremantle’s revenues touched €2.3bn ($2.4bn) last year while profits soared 15% on 2021, following another busy year of M&A action for the RTL-owned division as it looks to reach its €3bn revenue target by 2025.

The Jen Mullin-led firm has recently been linked with a move for Hasbro’s Entertainment One and has struck numerous other deals of late, including taking a minority stake in US comic book publisher and production company Artists, Writers & Artisans (AWA) in February.

Normal People

It now also owns Normal People producer Element Pictures, UK indie Dancing Ledge (The Responder), scripted Italian production company Lux Vide (Devils, Leonardo), Fabel (Bosch) and 72 Films (The Elon Musk Show), as well as 12 production labels in Norway, Sweden, Finland, and Denmark from Nordic Entertainment Group.

Fremantle’s results helped RTL’s revenue rise by 8.8% to reach a record €7.2bn, but EBITA profit was down 6% to €1.1bn.

Growth in group revenue was driven by the aforementioned performance of Fremantle, alongside RTL Deutschland (from the acquisitions of Gruner + Jahr in 2022 and Super RTL in 2021) and RTL Nederland.

Group profit halved, however, from €1.47bn for the prior year down to €766m, althought RTL pointed to the sale of ad tech outfit SpotX for €717m as the reason for the decline.

RTL’s streamer growth

Fremantle’s parent RTL also saw growth, with its streaming subscribers in Germany, the Netherlands and Hungary increasing by 44.3% to 5.5 million over the year.

Streaming revenue was also up – albeit at a shallower curve than subs growth – by 19.7% to €267m, largely driven by RTL+ in Germany and Dutch offering Videoland.

America’s Got Talent

The number of paying subscribers for RTL+ increased by 48.1% to 4 million, compared to 2.7 million at the end of December 2021.

The strategic partnership with Deutsche Telekom to bundle RTL+ Premium in Magenta TV, reality TV formats, football matches of the UEFA Europa League and the growing number of original formats such as Sisi, Der König von Palma and the Bushido documentary contributed to this growth, according to RTL.

The company counted 62 new originals available in 2022, down slightly from 67 for the prior year.

RTL Deutschland is also expanding its streaming business beyond video. It launched its RTL+ Musik app last year, providing access to ore than 90 million songs and more than 100 radio streams. The company entered into an exclusive deal with Deezer and added podcasts to the app in November, and ebooks in December.

Dutch highs

Paying subscriber numbers for Dutch streaming service Videoland also grew, with an 11.8% uptick to 1.22 million, compared to 1.09 million at the end of December 2021.

Fremantle’s Andrea Scrosati & Jennifer Mullin

Exclusive content such as originals Sleepers and Mocro Maffia, a documentary about the Dutch singer André Hazes, helped growth according to RTL, while the fifth season of US drama The Handmaid’s Tale and the Dutch kickboxing live events of the Glory series were also subs drivers.

Hungarian streamer RTL+, including the RTL+ Active offering, which was launched in November, counted 251,000 subs at the end of December, having integrated former services RTL Most and RTL Most+.

RTL+ Hungary operates a direct-to-consumer subscription service, a B2B2C version and an ad-funded registration-based model.

RTL said it expected its revenue this year to hit between €7.3bn and €7.4bn, and adjusted EBITA to be between €1bn and €1.05bn, with streaming startup losses to come down to under €200m from €233m.

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