RTL looks to fact-based television to reboot revenues
(Paragraph 11 of this story was corrected to make clear that the 2% revenue growth was compared to the first half of 2019. Compared to the first half of last year, revenue rose by 21.5%).
RTL Group expects big returns from serious documentaries tackling public issues like financial fraud and the Wirecard scandal, as it labours to regain pandemic losses, the Luxembourg-based media company said on Friday.
RTL Group announced €929 million in profit during the first half of this year. But about half of that came from selling a US advertising technology business, CEO Thomas Rabe said in a response to a Luxembourg Times question during a conference call. The company also could record further capital gains later this year, including a €250 million payment from the sale of RTL Belgium that the company agreed in June.
Television advertising fell 7% over the first six months of the year compared to the same period in 2019, but the April-to-June quarter saw a slight increase over the same pre-pandemic period, the company said.
RTL's content production division, Fremantle, in May established a division dedicated to filming quality documentaries starting with projects looking at the fashion industry, water scarcity and the scandal involving the collapse of former high-flying German fintech firm Wirecard.
"There's strong and growing demand for high-end, factual content and documentaries, particularly from streaming services," Rabe said.
The company now is counting on Fremantle to double its annual revenues compared to last year to €3 billion by 2025 -- an amount equal to RTL's total revenues during the first half of this year.
"We also have big ambitions for our global content business" Rabe said.
Rabe additionally highlighted that the company planned to focus more on online streaming subscriptions in Germany and the Netherlands and producing dramas, game shows and other entertainment programming RTL sells to other media companies around the world.
Rabe is also CEO of German media giant Bertelsmann, which has been majority owner of the company, founded in Luxembourg in the 1920s. Bertelsmann now owns about 76% of RTL, with the rest traded publicly.
In a corporate reorganisation, RTL Group said on Friday its German division would pay Bertelsmann €230 million to fully acquire Gruner + Jahr’s German publishing assets that include magazine titles like Stern, Geo and Capital.
RTL's €3 billion in revenue so far this year represented 2% growth compared to 2019, after accounting for the impact of exchange rate effects as well as corporate acquisitions and disposals. Compared to the first half of 2020, at the start of the pandemic, revenue was up 21.5%.
Revenue from RTL's on-demand streaming services rose 34% to €107 million, but losses from start-up costs increased sharply to about €150 million, the company said.
Recouping pandemic losses
In March, RTL Group announced its 2020 profits fell by 28% to €625 million after the coronavirus pandemic largely shut down advertising and productions in the first half of last year.
RTL Group still employs 600 people at its headquarters in Luxembourg's Kirchberg business district, although many of its operations have been moved to Cologne.
Only 1.2% of the company's revenues were generated in Luxembourg last year. The Grand Duchy's government pays the broadcaster more than €10 million a year to air Luxembourgish-language programmes. The government is likely to pay RTL more under a new seven-year contract starting in 2023 now being negotiated, Prime Minister Xavier Bettel said in May.
RTL owns stakes in TV channels and radio stations in Luxembourg, Germany, France, Belgium, the Netherlands, Spain, Hungary and Croatia. It also owns companies in advertising, streaming technology and advertising sales.
The Luxembourg Times has a new mobile app, download here! Get the Luxembourg Times delivered to your inbox twice a day. Sign up for your free newsletters here.
