RTL sets ambitious SVOD target, promises big original content investment

RTL aims to grow the number of paying subscribers to its SVOD services to three million and to grow revenue from video-on-demand to €360 million by 2021, after the number of paying subscribers to its services passed the one million mark at the end of last year.

Bert Habets

CEO Bert Habets said the group would focus on creating “local streaming champions” as well as strengthening content creation. RTL will invest at least an additional €350 million in expanding its streaming offerings over the next three years, including €300 million to be invested in content across all genres.

Habets emphasised that the investment should not have a significant impact on RTL’s bottom line.

“As our streaming services are deeply integrated in our families of TV channels, these investments will generate sizeable additional revenue and will thus have limited impact on our operating profit. Every investment in local, exclusive content is an investment for the long run, strengthening both our linear TV channels and streaming services. In other words: we will continue to generate very healthy profit margins,” he said.

RTL’s paying subscriber base, combining TV Now Premium in Germany and Videoland in the Netherlands, passed the one million mark at the end of 2018, and the company aims to triple this within three years. TV Now Premium’s base grew by 43.5%, while Videoland grew by 134.9%, driven by local originals such as Temptation Island VIPs and crime series Mocro Maffia, both made exclusively for the service.

Habets said that the group may “increase our ambitions in this space” if SVOD growth exceeds expectations.

Habets said that RTL also aims to generate more than €500 million from international drama productions from Fremantle by 2021, adding that drama series were “also key for the expansion of our streaming services”.

The group posted solid full-year 2018 revenue figures that were boosted by its digital offerings and its Fremantle production unit. Group revenue was up 2.1% to €6.5 billion, driven by its digital businesses, Fremantle and a strong performance by RTL Nederland. Digital revenue was €985 million, up from €826 million, and now represents 15.1% of the total.

RTL said that only 45.8% of its revenue now came from TV advertising, with the remainder coming from activities such as content and platform revenue as well as digital.

RTL posted EBITDA of €1.38 billion, down 5.7% as the result of the one-off sale of the group’s Paris buildings in 2017, but up 0.7% on an adjusted basis.