Covid-19 weakens RTL Group
The Luxembourg-based international broadcaster will provide an update on its activities on Thursday, as lockdown imposed in several European countries has frozen advertising and television productions that generate two-thirds of its revenue.
The Luxembourg-based international broadcaster will provide an update on its activities on Thursday, as lockdown imposed in several European countries has frozen advertising and television productions that generate two-thirds of its revenue.
(ASdN) – Will RTL Group be added to the long list of victims of covid-19? As it announced a social plan at the end of 2019, the international broadcaster, whose listed shares are majority owned by German media giant Bertelsmann, is expected to release financial results for the second quarter of the year on Thursday. A mixed result that promises to be.
Because confinement has brought its share of advantages and disadvantages. In March, the media group declared that its television and radio channels reached 4% more viewers and listeners hungry for information and entertainment as the health crisis forced them at home.
Streaming strategy
But if the confinement had a positive impact on the group’s audience, it also had more negative effects. Advertising revenues have therefore fallen. “Cancellations of advertising reservations and postponements of productions will have a negative impact on the group’s results in the months to come”, the RTL warned in April. It then announced that it would reduce the costs of its mainly European television and radio channels. In the first quarter of this year, turnover has already fallen by 3.4%.
A fall that comes as the broadcaster has made it a priority to create TV streaming services Now in Germany and Videoland in the Nederlands. Billions of euros have already been invested in these companies. If RTL Group plans to reach the breakeven point by 2025, the health crisis could have contributed to its development.
The turnover of the group’s streaming services thus increased during the first three months of the year, reaching 37 million euros. In March, the group also had 1.4 million paying subscribers. A figure he hopes to inflate within five years, between 5 and 7 million.
As a reminder, RTL is Bertelsmann’s largest division in terms of turnover. The company has stakes in television and radio stations in Germany, France, Belgium, the Netherlands, Luxembourg, Spain, Hungary and Croatia. RTL Group has stakes in 68 television channels, eight streaming platforms and 30 radio stations, as well as in production and digital video companies.
