RTL Group Posts Record Results as Company Goes Global with 'Deutschland '83,' Digital Biz
Fremantle revenue slips amid the cancellation of 'American Idol,' but overall revenue and profit set new highs as the German media giant shifts focus to online operations and "producing our own content."
RTL Group, Europe's largest television company, posted record numbers for 2015 on Thursday, the result of an aggressive push into digital and drama productions.
Revenue at RTL, which owns American Idol producer FremantleMedia as well as such major European channels as Germany's RTL and M6 in France, topped $6.5 billion (€6 billion) last year, a 3.8 percent increase and a company record. Operating profit (EBITDA) also hit an all-time high, rising 2 percent to $1.2 billion (€1.17 billion).
Revenue at FremantleMedia slipped to $113 million (€103 million), largely from the cancelation of Idol in the U.S. as well as from the company's major investment in production. Fremantle, known for its non-scripted formats, is shifting its focus to fiction series. Last year, it bought Italian production house Wildside — which is producing Jude Law series The Young Pope — and French companies Frontaram and Kwai. It also took a 25 percent stake in British drama group Corona TV.
Fremantle's German production company, UFA, last year produced Deutschland 83, the first German-language series to air on a U.S. network (Sundance TV), and its North American division will produce the hotly anticipated adaptation of Neil Gaiman's American Gods for Starz.
"This trend will continue and see scripted entertainment taking a larger share of FremantleMedia's total revenue," said RTL's co-CEOs Anke Schaferkordt and Guillaume de Posch in a joint statement. "Producing our own content and owning the rights to it will be one of the keys for further growth."
The other strategic shift at RTL is toward online and global expansion.
The German market remains RTL's base, and the territory provided close to 60 percent of the company's profits in 2015, but RTL clearly has its sights set on international expansion.
RTL has invested heavily in digital start-ups in the past few years, mainly in North America, where it has snatched up online video platform BroadbandTV, fashion MCN StyleHaul and SpotX, an online video advertising group. Last year, RTL led the most recent financing round for Clypd, a platform for programming ad sales for linear TV channels, and for VideoAmp, a company that analyzes viewer data across all platforms. RTL currently holds a 17.4 percent stake in Clypd and 21.5 percent in VideoAmp.
RTL has also seen a major increase in advertising revenue, from companies such as Facebook and Google, for online streaming of its TV shows. RTL said, taken together, its catchup services, websites and MCNs attracted a total of 105 billion online video views last year, nearly three times the number reached in 2014.
The company's digital revenue shot up 72.2 percent to $557 million (€508 million) in 2015.
Schaferkordt and de Posch said they expected moderate growth this year, with the digital business being the main engine.