RTL sees huge earnings drop, moves forward with streaming strategy

RTL was hit by the impact of a moribund German TV advertising market in its first half, with earnings cut in half and revenues down 5.1% to €3.1 billion.

Adjusted EBITA was €250 million, down from €501 million, mostly due to the performance of the German market.

Thomas Rabe

The revenue drop was 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 €950 million instead of the previous estimate of between €1 billion and €1.05 billion.

On the bright side, streaming revenue was up 16.9% to €152 million.

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 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 streaming and production outfit Fremantle.