American Idol and digital costs hit FremantleMedia, RTL

Anke Schäferkordt and Guillaume de Posch

FremantleMedia has seen a sharp decrease in profits with parent group RTL blaming lower revenue from American Idol and increased investment in content and digital businesses.

For the nine months to September, the production and distribution group reported EBITA profit of €54 million compared with €77 million in the same period in 2013.

The figures came out in broadcast and media group RTL’s latest financial report this morning. Commenting on the wider RTL Group’s performance, co-CEO’s Anke Schäferkordt and Guillaume de Posch said: “While RTL Deutschland and RTL Nederland report significant profit growth, the economic situation in France and for FremantleMedia remain challenging. In the third quarter, significant revenue and EBITA growth in Germany led to stable Group results, and we had a good start into the important fourth quarter.”

FremantleMedia and RTL have been investing heavily in digital platforms and content, which is coming at a cost. FremantleMedia North America launched digital production unit Tiny Riot and RTL has bought into video advertising platform, SpotXchange, and fashion MCN Style Haul.

The Group will have invested more than €240 million in digital businesses in 2014, it said this morning. Group digital revenue was up 16% to €180 million. The investment is also paying off in traffic terms, with FremantleMedia’s 175 YouTube channels claiming a cumulative 6.2 billion views this year, a 34.8% increase on 2013.

RTL reported overall profit of €360 million for the nine months to end-September compared with €593 million a year earlier. Revenue was €3.9 billion compared with €4 billion a year earlier.

The company said TV advertising markets across Europe improved in the first nine months of the year, with the exception of France, which has flat, and Belgium, which was down.