European media giant RTL Group, the parent company of Fremantle, has reported a decline in revenue and profits in the first half of this year. This is mainly due to soft ad sales, particularly in the company’s core German market.
In the first half, RTL Group’s revenue slipped 5.1 percent to €3.1 billion ($3.4 billion). Adjusted EBITA profits also slumped to €250 million ($275 million), which is half of what they were in the first half of 2022. Additionally, group profit fell more than 56 percent to €132 million ($145 million).
Despite these declines, there is a sliver of hope for RTL in the form of streaming growth. The company’s streaming services, RTL+ and Videoland, saw significant growth in subscriber numbers, surging by 34 percent to 6 million. Streaming revenue also increased by 16.9 percent to €152 million ($167 million).
However, RTL Group remains heavily reliant on the traditional broadcasting model and has struggled to diversify by expanding its subscription video-on-demand (SVOD) offerings. The company’s CEO, Thomas Rabe, acknowledged the challenges posed by the changing landscape of video viewing and emphasized the need for business transformation.
Related Post
Rabe stated that the company would be investing in premium content, leading national streaming services, and advertising technology to drive its transformation. Additionally, technology, particularly Artificial Intelligence (AI), plays a crucial role in this transformation. According to Rabe, AI offers opportunities to increase efficiency and generate content. Currently, RTL Group utilizes AI in advertising planning and has started to explore its potential in supporting content creation with generative AI.
Looking ahead, RTL Group expects an adjusted EBITA of approximately €950 million ($1.04 billion) for the full year. However, the company also anticipates start-up losses of around €200 million ($220 million) on its streaming services.
Overall, RTL Group’s first-half results reflect the challenges faced by traditional media companies in adapting to the changing landscape of media consumption. While streaming growth provides some hope, the company must continue to invest in transforming its business and leveraging emerging technologies to stay competitive in the market.
