RTL profits plummet 50% as advertising woes hit Germany, Fremantle target remains

Thomas Rabe

European media giant RTL has seen its profits nose dive thanks to a moribund German TV advertising market, although its streaming interests and production-distribution outfit Fremantle provided some relief.

In its first half results released today, RTL said its profits had been cut in half while revenues were down 5.1% to €3.1bn.

Adjusted EBITA was €250m, down from €501 million, mostly due to the performance of the German market, with the revenue drop marginally less – 4.3% ­– on a like-for-like basis. Advertising sales were down 12.5%, pushed down by a 15.5% drop in Germany.

The dire revenue and earnings results led the group to modify its full-year guidance, with EBITA now expected at around €950m instead of the previous estimate of between €1m and €1.05bn.

Streaming relief

Streaming provided some relief to the results, with revenue up 16.9% to €152m.

American Idol

Paying subscribers for RTL+, the group’s German streamer, increased 31% year on year to 4.489 million. The company’s strategic partnership with Deutsche Telekom to bundle RTL+ Premium within Magenta TV contributed significantly to the growth.

Paying subscribers for Videoland, RTL’s Dutch streamer, grew 17.5 per cent year on year to 1.268 million.

The number of paying subscribers for RTL+ in Hungary (including RTL+ Active), the streaming offering launched in November last year, was 285,000 at the end of June 2023.

RTL is moving forwards with its strategy of bundling streaming video with non-video products. Having boosted its RTL+ Musik app and promoted its RTL+ Max offering comprising video, music, podcasts and audiobooks, for €12.99 ($14.21) a month, it is now in the process of launching the RTL+ multimedia app, which adds magazine content to the bundle.

Speaking to analysts, CEO Thomas Rabe highlighted RTL’s streaming success and said the company was “investing through the cycle and maintained investments in content streaming technology and data at a high level”.

Regarding the advertising market, Rabe said that “challenging advertising markets are equally part of the story of this first half year, although we’re seeing first signs of market stabilization in Germany”.

He said that company had adjusted its outlook for the full year 2023 we now expect an adjusted EBIT half around €950 million after streaming startup losses of around €200 million.

Despite the downshift in earnings guidance, RTL confirmed its mid-term growth targets for American Idol firm Fremantle, which is attempting to hit revenunes of €3bn by 2025. Earlier this year, CEO Jen Mullin said she expected a “rocky road” for the industry across the remainder of this year and into 2024.