RTL Group, Europe’s largest commercial TV company and owner of production giant Fremantle (American Idol), on Friday reported a 9.5 percent fall in revenue and a nearly 28 percent drop in profits for 2020 due to the coronavirus pandemic. But it was upbeat on what it called a “strong rebound” in TV advertising at the end of the year, and major growth in its streaming business.
RTL booked $7.21 billion (6.017 billion euros) in overall revenue last year, with profits of $749 million (625 million euros). Last year was a year of consolidation for RTL, which sold off Canadian online multichannel network BroadbandTV and French cash-back site iGraal for a combined $189 million (158 million euros), as well as signed a deal, not yet closed, for the sale of video ad serving platform SpotX to the U.S. ad-tech company Magnite for $560 million in cash and 14 million shares of Magnite stock.
In Europe, RTL took over full control of RTL Belgium and bought out Disney’s 50 percent stake in Super RTL, giving it full control of the German kids network. RTL’s streaming business saw significant growth in 2020, with paying subscribers for its German service TV Now and Videoland in the Netherlands, up 52 percent year on year.
In total, RTL now has 2.19 million streaming subscribers across both services. The company inked a carriage deal with Deutsche Telekom to integrate TV Now in Telekom’s digital TV offering Magenta TV, which should significantly increase TV Now’s reach.
RTL Group aims to grow its total number of paying subscribers in Germany and the Netherlands to between 5 and 7 million, and to generate at least $600 million (500 million euros) in streaming revenue and reach break-even on an adjusted EBITA basis, by 2025. By then, the group plans to grow its annual content spend for TV Now and Videoland to $419 million (350 million euros).
In France on October 20, RTL subsidiary Groupe M6 launched joint subscription streaming service Salto together with Groupe TF1 and France Télévisions.
RTL CEO Thomas Rabe said there was still “a strong case for consolidation in the European broadcasting industry” in the post-COVID era. “We are currently reviewing such options for our controlling stake in the French broadcaster Groupe M6, with a view to creating value for our shareholders,” he added.
On the production side, RTL subsidiary Fremantle continued its push into high-end drama with the launch of Jude Law-starrer The New Pope, German-language series Deutschland 89 and French drama No Man’s Land. In 2020, Fremantle delivered a total of 54 dramas from 15 — compared to 53 from 14 territories in 2019.
With COVID-19 restrictions slowly lifting across Europe, RTL is optimistic revenue and profits will bounce back. RTL Group is forecasting full-year revenues of $7.4 billion (6.2 billion euros) with operating profits (adjusted EBITA) of around $1.17 billion (975 million euros).