RTL Group Revenue Hit As Weak Ad Market Counters Streamer Growth

A still weak advertising market caused a drop in revenue at European broadcasting giant RTL Group, Fremantle’s parent company, which reported a 6.9 percent drop in revenue to 4.66 billion euros from January to September 2023. Group CEO Thomas Rabe blamed “challenging market conditions,” particularly chronically weak advertising sales. RTL Group now expects TV advertising revenue, its main source of income, to fall by a mid-single digit percentage in the second half of 2023 and Fremantle’s full-year revenue will be lower than expected.

RTL Group’s streaming activities, on the other hand, continue to show strong growth, with the German and Hungarian platform RTL+ and the Dutch service Videoland recording a 30.3 percent increase in paying subscribers year-on-year to 6.2 million. Streaming revenue for the nine-month period this year rose 21 percent, the company said. Rabe confirmed RTL Group’s growth targets for its streaming business, which will see the company increase its annual content spend on its streaming services to approximately €600 million ($641 million), with the aim of reaching a total of 10 million paying subscribers across RTL+ and Videoland. increasing streaming revenues to €1 billion ($1.07 billion) and achieving profitability in
2026.

Until then, RTL is prepared to absorb substantial start-up losses, which amounted to €233 million ($249 million) last year and are expected to reach approximately €200 million ($214 million) in 2023.

Entering the fourth quarter, Rabe said: “European advertising markets are picking up
softer than we expected, and despite countermeasures we have had to adjust our strategy
prospects.”

RTL Group now expects TV advertising revenue to decline by a mid-single digit percentage in the second half of 2023 and Fremantle’s full-year revenue to be lower than expected. Overall, RTL Group’s annual revenue for 2023 is forecast to reach €6.9 billion ($7.4 billion), down from the €7 billion previously expected.

However, Rabe confirmed that RTL Group will continue to support Fremantle in its aim to become a €3 billion ($3.2 billion) company in turnover by 2025. RTL has funded Fremantle’s recent expansion, which has seen it acquire a number of independent businesses. production companies, including the Italian group Lux Vide (Devils, Leonardo), the US-based Fabel (Bosch) and Irish outfit Element Pictures (Poor things, Normal people).