Revenues at Bertelsmanns Luxembourg-basedRTL Group, a media giant which ownsFremantle, slid 9% to 1.4 billion ($1.5 billion) for the first quarter of 2023, financial results released on Thursday have revealed.
The group attributes this to significantly lower TV advertising revenue, particularly in Germany, and the disposals of RTL Belgium and RTL Croatia.
Fremantles revenues were down 5.6% to 435 million (Q1/2022: 461 million), mainly due to timing effects of production deliveries, the group said.
The groups total advertising revenue fell to 700 million (Q1/2022: 829 million), of which 545 million represented TV advertising revenue (Q1/2022: 653 million), 76 million digital advertising revenue (Q1/2022: 83 million) and 39 million radio advertising revenue (Q1/2022: 46 million). Distribution revenue was down by 1.8% to 107 million (Q1/2022: 109 million).
On the positive side, the groups streaming services RTL+ and Videoland continued growing, with paying subscribers up 37.1% to 5.9 million and streaming revenue up 15.6% in Q1/2023.
The quarterly results note the successes of Fremantle, which include the launch of hit shows Japans Got Talent and Saudi Idol, a German version of Too Hot to Handle for Netflix and a U.S. version of the reality format Farmer Wants a Wife for Fox. Fremantle also announced the acquisition of global rights to the hit U.K. series The Piano from Love Productions. Fremantle also launched Wreck on Hulu and the third season of Exit on NRK in Norway. The Wildside series The Good Mothers launched on Disney+ after winning the inaugural series award at the 2023 Berlinale.
In February 2023, Fremantle secured a two-year partnership with Nine Hours, the new label from Edward Berger, the director of the Oscar-winning film All Quiet on the Western Front. The agreement will provide Fremantle with first-look access to Nine Hours television projects and second-look access to new film projects. Fremantle also struck a first look deal with Oscar- and Emmy-winning documentary filmmakerAmy Berg.
While the report notes that the geopolitical and macroeconomic environment remains volatile and the impact on RTL Groups businesses continues to be hard to predict, the groups outlook is robust, albeit subject to a rebound of the TV advertising markets in the second half of 2023, in particular in Germany.
The group expects its full-year revenue for 2023 to increase to between 7.3 and 7.4 billion and its adjusted EBITA (Earnings before interest, taxes and amortization) for 2023 to be between 1.0 and 1.05 billion. Streaming start-up losses are expected at just below 200 million (2022: 233 million). Consequently, the group expects its adjusted EBITA before streaming start-up losses to be between 1.2 and 1.25 billion (2022: 1,316 million).
Thomas Rabe, CEO of RTL Group, said: RTL Group made good progress on its strategic and operational agenda in the first quarter of 2023. We strengthened our core business with audience share gains in our largest markets, Germany and France, and renewed the exclusive broadcasting and streaming rights for the Uefa Europa and Conference League in Germany. We are pleased with the strong growth of our streaming businesses, adding more than 400,000 paying subscribers in the first quarter alone. Our global content business Fremantle has continued its creative success story across drama and film, entertainment and documentaries, with numerous awards and new partnerships with high-profile creatives such as Amy Berg and Edward Berger.
In line with our expectations, TV advertising markets were very challenging in the first quarter. As noted in March, our outlook is based on a rebound of the TV advertising markets in the second half of the year, in particular in Germany. On this basis, we confirm our outlook for the full year 2023, Rabe added.