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European television giant RTL Group is starting to feel the pain of COVID-19.
Advertising revenue at the company, which operates such commercial networks as RTL in Germany and France’s M6, started to dip in early March as the novel coronavirus infection rate began to spike in northern Europe. That drove overall revenue for the first quarter of 2020 down 3.4 percent to $1.59 billion (€1.466 billion), RTL reported Thursday.
“At the beginning of March, we registered first cancellations of advertising bookings, as well as postponements of productions,” said RTL Group CEO Thomas Rabe. “This trend has accelerated with the introduction of wide-ranging lockdown measures across Europe in later March. We are making good progress in implementing counter measures to reduce costs and preserve liquidity.”
Revenue at RTL’s core broadcast business in the first three months of 2020 was down 4.8 percent to $1.13 billion (€1.035 billion) and sales at its content division Fremantle were flat at $411 million (€378 million), 1.3 percent lower than the same period last year.
Stay-at-home and quarantine orders, however, appear to have helped RTL’s online business. The company saw a 34 percent jump in subscribers for its streaming services TV Now (in Germany) and Videoland (Netherlands). Together, the two SVOD services boast 1.53 million subscribers. M6’s online catch-up service 6Play in France saw a similar bump, with an additional 1 million users registering for the service and an 45 percent increase in videos viewed from mid-March to mid-April.
RTL on April 2 withdrew its original financial forecast for the year, citing uncertainty amid the COVID-19 pandemic. Rabe on Thursday said the company was still not in a position to assess the full economic damage of the coronavirus on its businesses this year.
RTL, however, did note that it has a stronger position than most, having reduced its net debt from $418 million (€384 million) at the end of last year to $217 million (€200 million) as of March 31. RTL can also dip into unused credit facilities from its parent company Bertelsmann, the earliest of which mature in 2023.
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