RTL posts strong results as it focuses on VOD and drama

RTL announced strong Q2 and H1 results as it focuses on its two main growth initiatives – building mass-audience VOD services and expanding FremantleMedia’s drama output.

The German broadcaster said that it continued its business development and ‘Total Video’ strategy in the first half of the year with H1 revenue up for the fourth consecutive year – despite “significant negative exchange rate effects” and major sports events like the Winter Olympics and the FIFA World Cup.

In the company’s earnings announcement, RTL Group CEO Bert Habets said that in the rapidly changing video industry, growth is mainly coming from non-linear or streaming services.

“We will further increase investments in our video-on-demand services, with a clear focus on local, exclusive content, and gradually adopt a hybrid model – combining a free, advertising-financed service with a premium pay product,” he said.

“First examples of our building strong local streaming champions are the upcoming massive expansion of TV Now in Germany and Videoland in the Netherlands.”

RTL announced in June that it would significantly expand TV Now by offering additional local and exclusive content. It said that paid subscriber numbers grew 43.5% year-on-year at the end of Q2.

In April RTL Nederland also unveiled plans to merge its ad-funded platform RTL XL and its subscription VOD service, Videoland, into a single platform. It said total subscriber viewing time grew 204% in the first six months of 2018, compared to the same period last year.

On the drama front, Habets said that FremantlMedia is “seeking funding for at least 35 scripted series ideas that we want to realise”.

He estimated that international drama productions will generate more than 20% of FremantleMedia’s total revenue in 2019.

For the second quarter, RTL Group’s revenue was up by 3.6% year-on-year to €1.63 billion, mainly driven by digital and FremantleMedia.

Reported EBITDA was up 4.7% to €379 million, driven by RTL Nederland and Groupe M6. Meanwhile, net profit attributable to RTL Group shareholders was €207 million, up from €183 million a year earlier.

For the first half of the year, group revenue was up 2.3% to a record €3.05 billion while reported EBITDA was up by 1.9% to €638 million.