RTL Passes a Digital Milestone, but Its Linear TV Hangover Is Hard to Shake

RTL Group’s streaming business posts first quarterly profit and digital ad revenue surges 14.6%, but linear TV ad sales drop 6.5%, pressuring shares. Sky Deutschland acquisition approved.

RTL Group has crossed a critical threshold in the first quarter of 2026, with its streaming business swinging to profit for the first time and digital advertising surging by double digits. Yet the shares remain under heavy pressure, punished by a linear television market that continues to bleed revenue at an alarming rate. The contrast between the company’s future-facing segments and its legacy cash cow has rarely been starker.

Group revenue reached €1.295 billion in the three months to March, organic growth of 2.5% and slightly above the consensus forecast of €1.28 billion. The top-line improvement, however, masks a deep internal divergence. Total advertising income fell 3.2% to €663 million, dragged down by a 6.5% slide in linear TV ad sales to €474 million. Digital advertising, by contrast, climbed 14.6% to €118 million, offering a partial offset but not yet enough to fill the gap left by the traditional broadcast model.

The real breakthrough came in streaming. The division not only posted its first quarterly profit – a milestone after years of heavy investment – but also saw revenue jump 27% to €141 million. The paying subscriber base expanded 18.8% to 8.4 million, providing a firmer foundation for bundling content, advertising and platform revenue. Management is targeting a full-year operating profit of €25–50 million from streaming, a modest sum relative to the group total but a crucial signal that the unit can stand on its own.

Production subsidiary Fremantle added ballast, generating €372 million in sales with organic growth of 4.2%, despite negative currency effects. The recovery was led by the US, where the unit had struggled in prior periods. For the full year, RTL expects Fremantle to deliver organic growth of 3%, driven by new formats and international distribution. A production hub for the gameshow Holey Moley is being built in Portugal, the music format Hitster has launched in multiple markets, and a deal to stream American Idol live on Disney+ alongside ABC illustrates how programming rights now straddle linear and digital platforms.

Distribution revenue, a quieter but steady contributor, rose 9.1% to €96 million, fuelled by streaming partnerships with HBO Max, Amazon Prime Video, CH Media and Edeka. On the audience side, RTL Deutschland increased its share among 14- to 59-year-olds to 26.8%, while Groupe M6 reached 20.6% among 25- to 49-year-olds in free-to-air broadcasting.

The biggest catalyst ahead is the acquisition of Sky Deutschland. The European Commission has approved the deal without conditions, and completion is set for 1 June 2026. On a pro-forma basis, the combined businesses recorded roughly €8 billion in revenue last year. Once closed, RTL will have around 12.3 million paying subscribers in the DACH region and expects to unlock annual synergies of €250 million within three years, predominantly on the cost side. That integration is central to the company’s ability to translate digital momentum into improved profitability.

Despite these operational advances, the stock has suffered. After touching €29.95 intraday, RTL shares closed at €29.75 on Friday, a 1.33% decline on the day that extended a one-month slide of 21.92% (a slightly different calculation puts the decline at 21.39%). The market’s verdict is clear: even a profitable streaming division and a green-lit Sky merger are not enough to outweigh the persistent erosion of the linear advertising base.

RTL is sticking to its full-year forecast of revenue between €6.1 billion and €6.2 billion, with adjusted EBITA of around €725 million. The guidance does not bank on a sharp recovery in TV advertising, but rather on steady execution across digital, streaming and cost synergies. There is also a change in the finance department: Alexander von Torklus is expected to take over as CFO from Björn Bauer by the end of September, with Bauer moving to BMG.

The next set of quarterly numbers is due on 11 August. By then, Sky Deutschland will be part of the group, and the focus will shift from whether RTL can grow its digital business to how fast it can convert streaming profits, digital ad gains and Sky synergies into tangible earnings improvement. The first quarter showed that the pieces are in place – but the old model’s shadow remains long.