A still-soft advertising market pulled down revenue at European broadcast giant RTL Group, Fremantle‘s parent company, which reported a 6.9 percent drop in turnover from January to September 2023 to €4.66 billion. Group CEO Thomas Rabe put the blame on “challenging market conditions,” in particular cronically-weak ad sales. RTL Group now expects TV ad revenue, its core source of income, to drop by a mid-single-digit pecentage in the second half of 2023 and for Fremantle’s full-year revenue to be lower than expected.RTL Group’s streaming business, in contrast, continues to post strong growth, with the company’s German and Hungarian platform RTL+ and its Dutch service Videoland, marking a 30.3 percent jump in paying subscribers, year-on-year, to 6.2 million. Streaming revenue for the nine-month period of this year was up 21 percent, the company said. Rabe confirmed RTL Group’s growth targets for its streaming business, which will see the company boost its annual content spend to around €600 million for its streaming services with the goal of hitting a total of 10 million paying subscribers RTL+ and Videoland, increasing streaming revenue to €1 billion and to reach profitability in 2026.Until then, RTL is willing to swallow substantial start-up losses, which were €233 million last year and are expected to be about €200 million for 2023.Going into the fourth quarter, Rabe said, “European advertising markets are turning out to be softer than we expected, and despite countermeasures, we have had to adjust our outlook.”RTL Group now expects its TV advertising revenue to decline by a mid-single-digit percentage in the second half of 2023 and Fremantle’s full-year revenue to be lower than expected. Overall, it is forecasting RTL Group’s full-year revenue for 2023 to come in at €6.9 billion, down from the €7 billion previously expected.Rabe, however, confirmed that RTL Group is continuing to back Fremantle in its push to become a €3 billion ($3.2 billion) business, in revenue terms, by 2025. RTL has bankrolled Fremantle’s recent expansion, which has seen it snatch up several independent production companies, including scripted Italian group Lux Vide (Devils, Leonardo), U.S.-based Fabel (Bosch) and Irish outfit Element Pictures (Poor Things, Normal People).
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