RTL Group Posts Record Profit, Invests in Local Content

American Gods Still 3 Season 1 Episode 8 - Publicity - H 2017
Courtesy of Starz

The European TV giant, which owns FremantleMedia, has plowed money into production, backing series like 'American Gods' and 'Deutschland '83.'

RTL Group booked a record profit for the sixth straight year thanks to the continued strength of its core German TV business and increased investment in production and digital operations.

RTL on Wednesday reported a 3.8 percent boost in operating profits (EBITDA) to $1.82 billion (€1.464 billion) for 2017. Full-year revenue was up 2.2 percent to $8 billion (€6.4 billion).

RTL was keen to point out strong growth in its digital business, which saw revenues up 23 percent year-on-year to $1 billion (€826 million) But key profit drivers at the group remain the company's German TV business and its production and distribution division FremantleMedia.

Things were less rosy at RTL's other European operations, with revenue and profit down at RTL's Dutch and Belgium division. Profits also dipped in France, where RTL operates commercial TV group M6, but the company attributed that to a one-off effect linked to the company's gradual phasing out of its mobile contract provider in the territory, something RTL announced in 2016.

At FremantleMedia, the group booked a 8.5 percent increase in operating profits to $174 million (€140 million), though revenue slipped 2 percent to $1.83 billion (€1.47 billion) on unfavorable exchange rates. Fremantle is relaunching its flagship format American Idol on ABC this Sunday and the group has pushed aggressively into high-end drama production, with the likes of American Gods, which airs on Starz in the U.S. and on Amazon Prime worldwide. 

Bert Habets, named sole CEO of RTL at the end of 2017, said the company will continue to ramp up its investment both in original drama and in digital and on-demand services. “The launch of new services in Belgium, Hungary and Croatia over the next few months is the first example. We will also continue to build and develop our multi-platform networks and our investments in ad-tech,” Habets said.

For the coming year, RTL is forecasting revenue growth of between 2.5 and 5 percent and a “broadly stable” full-year operating profit. Revenue from digital operations are forecast to continue their double-digit growth. RTL wants digital revenue to account for at least 15 percent of total company sales by 2020/2022.