RTL Group has reported record revenue for the year ended December 31st 2018. It marks the fourth consecutive year of record revenue.
Group revenue increased 2.1 per cent to €6,505 million (2017: €6,373 million), once again reaching a record level. This was mainly driven by higher revenue from RTL Group’s rapidly growing digital businesses, Fremantle and RTL Nederland. Organic revenue growth1 was at 2.8 per cent, in line with previous guidance
Platform revenue increased 7.5 per cent to €343 million (2017: €319 million). Digital revenue grew to €985 million (2017: €826 million), and already accounted for 15.1 per cent of RTL Group’s total revenue (2017: 13 per cent).
RTL Group said its revenue is well diversified, with 45.8 per cent from TV advertising, 20 per cent from content, 15.1 per cent from digital activities, 5.3 per cent from platform revenue, 4.1 per cent from radio advertising, and 9.7 per cent from other revenue.
Bert Habets, Chief Executive Officer of RTL Group, commented: “With rapidly changing consumer behaviour and the rise of global tech giants and streaming platforms, we’ve moved from a local to a global competitive landscape. At the same time, international media markets are experiencing unprecedented change and consolidation. This is why 2018 saw the start of our transformation journey to foster organic growth within our portfolio, through our Total Video 2.0 strategy.
With this strategy we will focus on two clear priorities: building local streaming champions and strengthening our content creation. Accordingly, RTL Group will invest at least an additional €350 million to boost the expansion of our streaming services over the next three years – €300 million of which will be dedicated to content investments across all genres. As our streaming services are deeply integrated in our families of TV channels, these investments will generate sizeable additional revenue and will thus have limited impact on our operating profit. Every investment in local, exclusive content is an investment for the long run, strengthening both our linear TV channels and streaming services. In other words: we will continue to generate very healthy profit margins.
At the end of 2018, RTL Group passed the first million mark of paying subscribers, combining the subscriber bases of TV Now Premium in Germany and Videoland in the Netherlands. We plan to start similar services in other countries. Over the next three years, we aim to grow our total number of paying subscribers to at least 3 million. Our streaming services already show very promising growth rates in a highly dynamic market – thus we will always have the flexibility to further increase our ambitions in this space. This growth will help to further diversify RTL Group’s revenue streams.
With Fremantle we continue our push into drama production. As drama series are also key for the expansion of our streaming services, we have developed an ambitious growth plan for scripted series. Based on this growth plan, international drama productions are forecast to generate more than €500 million in revenue in 2021.” With Fremantle we continue our push into drama production. As drama series are also key for the expansion of our streaming services, we have developed an ambitious growth plan for scripted series. Based on this growth plan, international drama productions are forecast to generate more than €500 million in revenue in 2021.”