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‘American Gods’ Helps Drive Strong Q2 for RTL Group

RTL Group, Europe’s leading entertainment network, saw revenues rebound in the second quarter of 2017 following a weak first quarter. Figures for Q2, announced Wednesday, showed company revenues were up 8.8% year-on-year at €1.57 billion ($1.9 billion). This brought RTL’s half-year results to €2.98 billion ($3.6 billion), up 3.5% against the same period of 2016.

The sale of FremantleMedia’s “American Gods” (pictured) to Amazon Prime Video contributed to a significant rise in revenues for RTL’s expanding digital businesses, which proved a key driver of overall revenue growth. The company saw digital revenues rise year-on-year by €125 million ($149.3 million) in the first half of 2017. Overall digital revenues reached €389 million ($464.7 million) in the first half of the year, a 47.4% rise compared to 2016.

The growth in digital was also driven by organic growth at RTL’s BroadbandTV and StyleHaul, and the first-time full consolidation of video advertising company Smartclip and online video business Divimove. This was supported by revenue growth among RTL’s three core business units: Mediengruppe RTL Deutschland (up $43 million); FremantleMedia (up $35.8 million); and Groupe M6 (up $19.1 million).

A statement from RTL said: “These positive developments more than compensated [for] the absence of FremantleMedia’s production ‘American Idol’ in H1 2017 and the fact that all European TV advertising markets, in which RTL Group is active, decreased during the reporting period.” The absence of “American Idol” on U.S. network Fox had resulted in a 1.9% decline in RTL’s revenues during Q1.

RTL’s co-CEOs Bert Habets and Guillaume de Posch said the company’s diversification of revenue streams over the past five years, with investment in digital video and ad-tech businesses, as well as production of high-end dramas like “American Gods” and developing platform revenue for its broadcasters, was paying off.

“The strong set of financial results in the first half of 2017 clearly underline the importance – and the success – of our total video strategy,” said Habets and de Posch in a joint statement. “Despite tough comparatives to the first half of 2016, RTL Group continued to grow its top line and generated a very healthy EBITDA margin of 21%.”

The statement continued: “At the same time, the challenging development of the TV advertising markets across our footprint is a clear signal to even accelerate our strategy execution.” As a first move the CEOs announced that RTL would take full ownership of SpotX, a leading global platform for ad-serving and programmatic ad sales.

The group expects its total full-year revenue to grow between 2.5% to 5% with earnings before interest, taxes, depreciation and amortization likely to remain steady between -1% and +1%.

RTL sees 48.7% of its revenue come from TV advertising; 17.5% from content; 13.1% from its digital businesses; 5.3% from platform revenue; 4.1% from radio advertising; and the remaining 11.3% from other sources.

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