RTL Group revenues dipped 5.5% to €1.34B ($1.42B) in the third quarter, as lower turnover at Too Hot to Handle maker Fremantle dragged the figures down.
Fremantle’s Q3 numbers were not revealed in the unaudited financial statement released this morning, and low advertising revenue was also cited as a reason for the fall. However, across the nine months to September 2024, Fremantle has seen its revenue fall 7.1% to €1.43B, with RTL saying “the growth of the content market was lower than expected.”
Production and distribution giant Fremantle has also spent big on Asacha Media Group and Beach House Pictures this year, and RTL CEO Thomas Rabe forecasted a “strong content line-up in the fourth quarter” will “significantly increase” full-year adjusted earnings. Fremantle is set to deliver shows such as Netflix’s Battle Camp, Prime Video’s Costiera, BBC series The Listeners and doc Vietnam: The War That Changed America in the fourth quarter.
The numbers don’t make the best reading for Fremantle, which has been tasked with growing its full-year revenue to €3B by 2026. However, RTL reaffirmed it is “investing significantly in Fremantle – both organically and via acquisitions – across entertainment, drama and film, and documentaries.” The German giant also predicted adjusted EBITDA margins at Fremantle would increase to 9% by 2026.
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Overall, RTL posted full-year revenues of €4.21B, essentially flat year-over-year, with higher TV advertising streaming revenue at RTL Deutschland offset by the falls at Fremantle. On a pro-forma basis, including RTL Nederland, revenue was €4.66B, slightly up on 2023. RTL Nederland is in the process of being sold to DPG Media, but regulatory hold-ups have slowed the agreement. A previous attempt to merge its Dutch broadcasting assets with Talpa Network were scotched by watchdogs in January last year.
Nine-month RTL TV advertising revenue for this year was up 2.3% at €1.61B, though Q3 saw a 2.3% dip. This was blamed on the effect of the Olympic Games airing on public broadcasters in Europe in August and the economic environments in Germany and France. Distribution revenue was up 7.3% to €264M thanks to increases at RTL Deutschland.
Like many of the U.S. majors, streaming revenue shined through as a positive and is up 40.6% across the year at €277M. This was down to a “significantly higher number of paying subscribers, increased subscription prices in Germany and rapidly growing advertising revenue on RTL+ in Germany and M6+ in France.”
RTL+ has seen paying subscribers grow 24.4% to nearly six million, with a Deutsche Telekom bundle agreement a particular boon. Viewing hours have increased 60.3%, with the Q3 figure up a whopping 93.6%. Du gewinnst hier nicht die Million bei Stefan Raab was cited as an example of exclusive shows encouraging viewing.
In France, M6+ has attracted 20.4 million users since launch in May, up 27% year-over-year against former streamer 6play. Viewing hours increased 41% for the Jan-Sept period, with the likes of Les Traîtres Nouvelle Génération (The Traitors New Generation), The Good Fight and The Marvelous Mrs. Maisel driving viewing.
RTL is predicting its full-year Adjusted earnings will be between €700M-800M. “Persistent weakness of the German economy and TV advertising market,” willl mean this comes “in at the lower end of the range,” said Rabe. Revenues will come in at around €6.3B, down €300M on previous guidance.
“We are accelerating RTL Group’s transformation in a challenging economic environment,” said Rabe. “Our streaming services continue to grow dynamically in all key dimensions: number of paying subscribers, viewing hours, subscription and advertising revenue. At the current pace, we are confident to reach the seven million paying subscribers mark by the end of the year and remain on track to reach our long-term streaming targets and thus profitability by 2026.
“The integration of the newly acquired Asacha Media Group and Beach House Pictures into the global Fremantle network is progressing well. With a strong content lineup in the fourth quarter, Fremantle will significantly increase its full-year Adjusted EBITA.”
Europe’s commercial networks have seen TV advertising partially bounce back in 2024 after a brutal year prior, but the recovery hasn’t been as sharp as some market watchers had expected. Streaming is growing across the board, though the revenues aren’t yet at the level where one things offsets the other. Production and distribution, therefore, remain crucial to vertically-integrated businesses like RTL.
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