Fremantle and advertising dips hamper RTL’s growth

RTL Group has seen its revenue dip due to an uncertain TV advertising climate in Europe and declines at Fremantle.

For the first nine months of the year, the German media giant saw revenue drop 2.2% year-on-year to €4.1bn (£3.6bn), with reductions marginally offset by a jump in digital advertising revenue, which was up by almost a third (31.7%).

The M6 owner was hit by sluggish TV advertising markets in Germany and France, which has led the group to adjust its profitability forecast for 2025 from €780m to €650m (£687.2m to £ 572.7m).

Consequently, it is now anticipating group revenue to be €6.1bn (£5.4bn), rather than €6.4bn (£5.6bn).

Fremantle’s revenues decreased by 5.1% year-on-year to €1.35bn (£1.19bn) from January to September, primarily due to lower returns from the US, which was forecast because of last year’s America’s Got Talent spin-off.

However, RTL highlighted recent successes in the US including the greenlight of a straight-to-series order of a Baywatch revival for Fox and the first America’s Got Talent FAST channel.

Fremantle’s dip in revenue were hampered by phasing of production, partly offset by the super-indie’s acquisition of Asacha Media Group in March 2024.

The production and distribution group’s Q3 revenue was €447m (£394m), a 4.5% year-on-year decline, attributed to lower contributions from Asacha.

The super-indie’s adjusted EBITA margin is expected to increase to 9% by 2026 and it continues to target full-year revenue of €3bn (£2.6bn), driven by the acquisition of small and medium-sized production companies, IP and partnerships with creative talent.

Programme highlights from Q3 include the launch of strategy competition Pandora’s Box, created by the RTL Creative Unit in the Netherlands and developed with Fremantle. RTL reported that the format has already secured three international productions in the Netherlands, France and Hungary, with Fremantle overseeing international production and distribution.

RTL also pointed to the global success of true-crime series The Monster of Florence (Netflix), produced by Fremantle label The Apartment with AlterEgo.

Elsewhere in its results, RTL noted that revenue remained stable in Q3 at €1.3bn and that its streaming services continue to grow, with revenue increasing 26.6% year-on-year in the first nine months of this year to reach €350m (£308.3m).

It is also closing in on its goal of 8m paying subscribers by the end of 2025, with paying subscribers up 17.4% year-on-year to 7.6m.

Chief exec Thomas Rabe, who was revealed to be stepping down earlier this month, said: “The market environment remains challenging, with a reduction of TV advertising revenue in our core markets and an accelerated shift from linear TV to streaming.

“All streaming performance indicators – revenue, paying subscribers and viewing time – continue to point in the right direction. 

“With 7.6 million paying subscribers at the end of September, we are confident to pass the 8 million mark by the end of this year. 

“In 2025, we will reduce streaming start-up losses by more than half to around €50m and thus remain firmly on track for a profitable streaming business in 2026.”