RTL streaming growth fails to offset ad decline

Source: RTL

Continued growth of RTL’s streaming services failed to offset the impact of the ongoing advertising slump in the third quarter, with overall revenues down 10.3% to €1.6 billion.

Paying streaming subs grew by 30.3% year on year to 6.2 million, while streaming revenue was up 21.0% to €236 million for the period January to September. RTL did not break out the streaming revenue growth for the third quarter in its press release. However, streaming revenue for the first half was €152 million, meaning the third quarter delivered €84 million.

RTL had 6.041 million paying subscribers with its streaming services RTL+ in Germany and Hungary and Videoland in the Netherlands at the half year point, indicating third quarter growth of 139,000, which compares with growth of around 300,000 for the third quarter last year.

Paying subs for RTL+ in Germany were up 26.9% year on year to 4.665 million at the end of Q323, while Dutch service Videoland grew by 16.2% year on year to end with 1.289 million subs.

RTL+ in Hungary (including RTL+ Active), which launched in November last year, had 280,000 subs at the end of September 2023.

The drop in overall revenue for Q3 was attributed to weakness in the advertising market and the timing of deliveries from production outfit Fremantle, which also suffered, according to RTL, from a strong comparative period last year.

January to September Group revenue for this year was down 6.9% to €4.66 billion.

Persistent weakness

Due to ‘persistent weakness’ of the TV advertising market, in particular in Germany, RTL Group now expects its TV advertising revenue to decline by a mid-single-digit percentage in the second half of 2023 compared with previous guidance ”stable to slightly growing”, and Fremantle’s full-year revenue to be lower than expected due to more muted buyer activity.

The group now expects full-year revenue for 2023 of around €6.9 billion (previous guidance: around €7.0 billion) and an adjusted EBITA of around €900 million (previous guidance: around €950 million).

“Despite challenging market conditions, we are pursuing the transformation of our businesses with significant streaming and technology investments. 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,” said CEO Thomas Rabe.

“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.”