Germany's RTL Group Turns Drama, Digital Business into Record First Half

Jan Thijs/Freemantle Media
RTL's FremantleMedia is hoping to win over global audiences with high-end dramas like 'American Gods.'

RTL's FremantleMedia, best known for reality TV shows, is pushing heavily into scripted series with fantasy epic 'American Gods.'

Germany's RTL Group booked another record result for the first half of 2016, with operating profits (EBITDA) up 8.6 percent to €580 million ($655 million) on revenue of €2.878 billion ($3.25 billion), a 3.2 percent increase over the same period last year. Net profits, however, were down, at €341 million ($385 million), off €10 million from H1 2015.

The European giant, which controls nearly 60 TV channels across 10 countries, has so far managed the trick of holding on, and growing, its traditional TV advertising business while expanding into higher-growth digital operations. The company's German television operations posted a record-high result, with revenues jumping 5.5 percent to $409 million for the period. TV ad revenues were up everywhere the company operations, with the exception of Hungary, where RTL has faced political interference from the country's government.

At the same time, RTL's investments in online video are “starting to pay off,” according to co-CEOs Anke Schaferkordt and Guillaume de Posch. Digital subsidiaries Broadband TV, StyleHaul (a fashion-focused online network) and DiviMovie (which has a European focus) saw online video views and revenue soar. RTL said together its companies now generate more than 20 billion online video views per month. Digital revenue was up 20.5 percent to $298 million in the first half. That, however, still represents less than 10 percent of RTL's turnover.

FremantleMedia, RTL's production arm, also is maintaining a similar balancing act between reality and non-scripted shows, such as its hit Idol and Got Talent franchises, and more high-end drama productions. The group is making a big push with its upcoming fantasy epic American Gods, which premieres on Starz in the U.S. next year and which was recently picked up by Amazon Prime for multiple international territories.

At next month's Venice International Film Festival, FremantleMedia also will screen the world premiere of The Young Pope, its new drama series starring Jude Law and Diane Keaton and directed by Oscar winner Paolo Sorrentino.

Fremantle has been on a buying spree of late, taking stakes in multiple indie production companies, including Wild Blue Media, a British nonfiction shingle from Top Gear producer Gary Hunter; Dancing Ledge, a scripted production house that has a development deal with The Hobbit and Sherlock star Martin Freeman; and Eureka Productions, a U.S-based reality TV company set up by two of the execs behind the Master Chef franchise. RTL is counting on its new partners to provide a steady stream of content for its traditional and digital platforms worldwide.

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