RTL Group, the European broadcasting company that owns Fremantle, reported a 6.9% drop in revenue from January to September, due in part to the “persistent weakness” of TV advertising markets.
In Q3 alone, group revenue was down 10.3% to €1.6 billion, with the company saying 9.2% of this happened organically due to “timing effects at Fremantle and lower TV advertising revenue.”
Due to the current advertising landscape, particularly in Germany, RTL expects that TV ad revenue will decline by a “mid-single-digit percentage” in the second half of the year, with Fremantle’s yearly revenue also tracking lower than expected because of a decrease in buyer activity.
However, there has been continued growth in RTL’s streaming sector comprising RTL+ and Videoland. The group reported that paying subscribers are up 30.3% year over year to 6.2 million, while streaming revenue rose 21%.
Now, full-year revenue is estimated to fall around €6.9 billion, down from a previous figure of €7 billion, with an adjusted EBITA of €900 million, down from €950 million.
“Despite challenging market conditions, we are pursuing the transformation of our businesses with significant streaming and technology investments,” RTL Group CEO Thomas Rabe said in a statement. “Our streaming business grew strongly, with around 1.5 million net paying subscribers added over the past 12 months. In October, we started a major marketing campaign for Germany’s first all-inclusive entertainment app, RTL+ – comprising video, audio and text in one app. As expected, the decrease in TV advertising revenue has slowed down significantly in the third quarter and we have seen strong performance across the Group in September. Going into the fourth quarter, however, the European advertising markets are turning out to be softer than we expected, and despite countermeasures, we have had to adjust our outlook.”
