'American Idol,' Euro Ad Sales Boost RTL Group First Half

12:05 AM PST 08/24/2011 by Scott Roxborough

European television giant sees 24% profit jump, sales hit $4 billion.

COLOGNE, Germany -- The continuing strength of American Idol and X Factor -- along with solid TV ad revenues in Germany, France and The Netherlands sweetened first-half figures at Europe's leading television company -- RTL Group. RTL Wednesday reported a 3.4 percent revenue boost to $4 billion (€2.75 billion) while profits soared to $550 million (€382 million), a 24 percent jump on last year.

Steady or stronger ad sales in RTL's key western European territories -- Germany, France and The Netherlands -- were the main contributor to the company's sweeter bottom line. RTL's production subsidiary FremantleMedia, producer of American Idol and X Factor, reported 4.2 percent revenue growth, helped by stronger sales in North America, but saw operating profits (EBITA) slip 20 percent to $104 million (€72 million) as broadcasters worldwide cut back on Fremantle programs and squeezed margins on renewed shows.

RTL's core European broadcasting business remained strong, however. In France, where the company runs channels M6 and W9, operating profit was up 11.2 percent to $215 million. RTL's Dutch networks booked double digit sales growth and operating profits soared 84.4 percent to $85 million. In Germany, Europe's largest TV market, ad revenue was flat but RTL increased its total audience share and boosted operating profits 4.3 percent to $386 million. Things weren't so rosy in southern and eastern Europe, where ad sales continue to slide.

RTL is also reaching further abroad. In May the group signed a joint venture agreement with India's Reliance Broadcast Network to launch thematic channels on the sub-continent, including two English-speaking channels to bow in the coming months.

Old school free-to-air television remains RTL's bread-and-butter but the company is keen to point to its growing digital and on-demand businesses, citing a 27 percent jump in online ad revenues driven by some 928 million views of RTL-created Internet video content.

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