RTL Group’s Streaming Division Approaches Profitability Amid Subscriber Growth

RTL Group, the prominent European television conglomerate, has made significant strides towards profitability in its streaming division, as evidenced by a dramatic increase in subscriber numbers and online revenue in the past year, alongside a decrease in start-up expenses.

Strong Subscriber Growth and Revenue Surge

In its annual financial report released Thursday, RTL announced a notable 21% rise in subscriptions for its streaming platforms, which includes RTL+ in Germany and Hungary, as well as the recently launched M6+ in France. The total subscriber count has reached over 6.8 million, with streaming revenue skyrocketing by 42% to €403 million ($437 million), driven in part by price increases for RTL+ in Germany. The German version of RTL+ remains the standout performer, boasting approximately 6.06 million paying subscribers. Furthermore, the division reported a 22% reduction in start-up losses, now totaling €137 million ($149 million).

A Pivotal Moment for RTL’s Digital Future

Thomas Rabe, CEO of RTL, characterized these results as a “turning point” for the future of the company’s digital offerings. He stated, “Our streaming services are experiencing dynamic growth and have significantly cut their start-up losses in 2024. We are confidently on the path toward profitability by 2026.”

Strategic Partnerships Driving Growth

RTL’s ambitious expansion into the streaming sector is further strengthened by an enhanced partnership with Deutsche Telekom, extending the integration of RTL+ Premium into Telekom’s MagentaTV platform until 2030. This collaboration is anticipated to further boost subscriber numbers in Germany. Rabe also highlighted promising performance metrics from France, where the rebranding of the service to M6+ has resulted in a 30% increase in monthly users and a 35% rise in streaming hours compared to the previous 6play platform.

Future Projections

Looking forward, RTL has set an ambitious target of reaching 9 million streaming subscribers and generating €750 million ($816 million) in revenue by 2026.

Challenges in Traditional Television Business

While RTL celebrates its streaming success, the company’s traditional television networks in Germany are displaying less favorable trends. The combined audience share among RTL Deutschland’s key demographic of 14- to 59-year-olds has dipped from 27.4% to 26.3%. Advertising revenue for the television segment remained flat at €2.35 billion ($2.56 billion). Rabe noted a silver lining by contrasting RTL’s performance with rival ProSiebenSat.1, indicating that RTL Deutschland maintains a 6.3 percentage point lead over ProSiebenSat.1, the most substantial margin in over a decade.

Overall Financial Performance and Fremantle’s Production Challenges

On a group level, RTL’s revenue stabilized at €6.25 billion ($6.81 billion), though total profit decreased slightly to €555 million ($604 million) from €598 million the previous year.

Fremantle, RTL’s content production division, reported an 8% organic revenue decline, attributed primarily to the 2023 U.S. actors’ and directors’ strikes and budget cuts from streaming platforms and ad-funded broadcasters. This decline was somewhat mitigated by Fremantle’s recent acquisition of TV production firms such as Asacha Media and Beach House Pictures. Asacha operates several production entities in France, Italy, and the U.K., while Singapore-based Beach House specializes in non-scripted content, producing shows like Netflix’s Mind Your Manners and local versions of popular franchises like MasterChef Singapore.

A Promising Creative Year for Fremantle

Fremantle celebrated a successful year in 2024, highlighted by the Academy Award accolades received by Yorgos Lanthimos’ film, Poor Things, produced by Fremantle’s Element Pictures. However, with revenues amounting to €2.25 billion ($2.45 billion), the division remains far from its ambitious goal of reaching €3 billion ($3.26 billion) in annual revenue. RTL has since adjusted its expectations for this target, now aiming to achieve the €3 billion milestone in the “mid-term,” rather than by 2026 as originally intended.

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