March 13, 2020 / 7:59 AM / 24 days ago

RTL sees coronavirus impact, but commits to streaming investment

BERLIN (Reuters) - European broadcaster RTL Group (RRTL.DE) is seeing the first cancellations of advertising bookings and an impact on productions from coronavirus, CEO Thomas Rabe said on Friday, as he vowed to press on with investments in its streaming services.

With the epidemic paralysing travel and forcing governments to impose lockdowns to curb the spread of the virus, media companies are vulnerable to cuts in marketing budgets as companies across the board go into survival mode.

Production risks have meanwhile been highlighted by Oscar-winning U.S. actor Tom Hanks’ announcement that he and his wife, actress Rita Wilson, tested positive for coronavirus while working on a film in Australia.

So far RTL, which broadcasts to eight countries, hasn’t reported any cases of coronavirus on its production sets.

“There have been no cancellations but we will clearly have postponements,” Rabe told reporters.

Live shows like “Let’s Dance” and “Germany Seeks The Superstar”, a Pop Idol spinoff, will be aired by RTL in empty studios after the German authorities called for gatherings of more than 1,000 people to be called off.

As for sports, RTL shares rights to the at-risk Europa League with “over-the-top” streaming service DAZN. It has exclusive German rights to the Europa League and Europa Conference League, UEFA’s second- and third-tier competitions, from 2021-24.


It was too early to quantify the impact of coronavirus, Rabe said, after RTL turned in solid 2019 results and proposed an unchanged dividend, although he did expect the first quarter to be broadly stable and in line with expectations.

Shares in RTL, which is controlled by German publisher Bertelsmann (BTGGg.F), rose by up to 15% in early trading, halving losses for the year to date as markets steadied after Thursday’s panic selloff.

The start-up costs of ramping up streaming in Germany and the Netherlands, as well as the launch of French streaming alliance Salto in June, will push down core earnings before interest and amortization (EBITA) this year by 7%.

RTL counted 1.44 million streaming subscribers for Videoland in the Netherlands and TV NOW in Germany at the end of 2019, an increase of around 40%. It is targeting an audience of 5-7 million, annual revenue of 500 million euros and hopes to turn a profit in 2025.

Asked whether that risked leaving it lacking the scale needed to compete with Netflix (NFLX.O) or Amazon Prime (AMZN.O), Rabe disagreed, saying RTL’s local-language content would make its offering complimentary to the U.S. platforms.

Reporting by Douglas Busvine; editing by Thomas Escritt and David Evans

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