RTL Group S.A. (RRTL) Earnings Call Transcript & Summary

Ladies and gentleman, thank you for standing by. Welcome, and thank you for joining the RTL Group Half-Year Results Call. [Operator Instructions] And I would now like to turn the conference over to Oliver Fahlbusch. Please go ahead.

Good morning, everyone, and thank you for joining our half-year results call for analysts. The speakers for today's presentation are Thomas Rabe, the CEO of RTL Group; Elmar Heggen, our Deputy CEO and COO; and Bjorn Bauer, our CFO. The presentation for this call is available on our corporate website rtl.com following the link included in our press release under Download. The agenda on Slide 2 shows the areas our management team will cover today. And after the presentation, Thomas, Elmar and Bjorn are available to answer your questions. And with this, I'll hand over to Thomas.

Yes. Many thanks, Oliver, and good morning to all of you. Let me look at the most important developments of the past 6 months on Slide 4. Despite numerous external challenges, we made good strategic and operational progress. Our growth business, Streaming, progressed significantly, with more than 6 million paying subscribers for RTL+ in Germany and Hungary, plus Videoland in the Netherlands. We're investing through the cycle and maintained our investments in content, streaming tech and data at the high level of the previous year. For example, through the acquisition or renewal of the UEFA Champions League or Europa League rights or the international rollout of the success format, The Traitors. In our largest market, Germany received higher TV audience shares. RTL and Vox are now the #1 and #2 commercial TV channels in Germany, which is a clear testament to our program strength. And while we are pleased with our strategic and operational progress, challenging advertising markets are equally pride of the story of this first half year. Although we are seeing first signs of market stabilization in Germany, in particular, we've adjusted our outlook for the full year 2023. We now expect an adjusted EBITA of around EUR 950 million after Streaming start-up losses of around EUR 200 million. At the same time, I'd like to reiterate our midterm growth targets for Streaming and Fremantle. I'll come back to this later in the strategy update. And with all of this, hand over to Bjorn, who will take you through the group's financials.

Thank you, Thomas. Good morning, everyone. Let's start with the key figures on Slide 6 before we dive a bit deeper into our quarterly development, income statement and cash flow statement. On Page 6, in the first half of 2023, RTL Group's revenue decreased 5.1% to EUR 3.1 billion, mainly due to significantly lower TV advertising revenue. Adjusted for portfolio changes and a constant exchange rate, the revenue was down 4.3% organically. Our half year adjusted EBITA decreased from EUR 501 million to EUR 250 million, mainly significantly lower profit contributions from RTL Deutschland, which were driven by soft advertising markets. This development was broadly in line with our internal expectations. Already in March, we said that we expect a more back-loaded full year 2023, with an improvement in the second half of the year. Streaming start-up losses increased to EUR 87 million year-on-year due to higher investments in RTL+ in Germany and Hungary. As a result, adjusted EBITA before Streaming start-up losses came in at EUR 337 million. Group profit was down to EUR 132 million, mainly due to lower adjusted EBITA and higher capital gains in the first half of 2022, driven by the disposals of RTL Belgium and RTL Croatia. Earnings per share came in at EUR 0.48 for the first half year. Moving on to Slide 7. Here, you see the development of RTL Group's total and TV advertising revenue on a quarterly basis. Overall, TV advertising revenue decreased by 13% in the first half of 2023. Adjusted for scope effects, TV advertising revenue was down by 10% across our portfolios. In the first quarter, group revenue declined 9% on the back of an expected 17% decrease in TV advertising revenue. And this was in line with the guidance we gave you in March of a 15% to 20% decline for the first quarter. This development gradually improved from April to June. In the second quarter, revenue was down 2%, also due to significantly lower TV advertising revenue of minus 9%. But this decrease was largely compensated by higher revenue from Fremantle and RTL Group Streaming services. I want to point out that the decline of our TV advertising revenue is successively improving, especially in Germany. TV advertising revenue in June and July was already back to prior year levels. Moving on to Slide 8. In looking at the main items [ below ] adjusted EBITA down to group profit. Significant special items amounted to EUR 78 million, mainly reflecting restructuring measures at RTL Deutschland and to a lower degree at Fremantle. RTL Group recorded capital gains of EUR 60 million in the first half of 2023, mainly due to the dilution of our stake in Global Savings Group and an equity investment held by [ Groupe ] M6. As you know, we sold our interest in SpotX to the U.S. ad-tech company, Magnite, in April 2021 and received part of the consideration in shares. Magnite's share price increased in the first half of 2023, leading to a re-measurement of the Magnite shares. This positive effect is reflected in the line fair value measurement of investments and re-measurement of earn-outs. The financial result was plus EUR 11 million, mostly driven by re-measurement of existing [ put, call ] options and by higher interest rates. The group's tax charge came in at EUR 57 million. The reported tax rate in the first half of 2023 was 30% compared to 31% for the first half of 2022. Looking now at the next slide, the cash flow statement. Our operating free cash flow was minus EUR 33 million in the first half of 2023, reflecting the operating performance and significant investments to boost our growth businesses, Streaming, and the more capital-intense scripted business at Fremantle. With the dividend payment for the financial year 2022 amounting to EUR 619 million, we reduced our current deposits with Bertelsmann and also drew from our revolving swing line credit facility. These effects are shown in the line transaction with shareholders and its subsidiaries and changes from financing activities. To summarize, with negative operating free cash flow and dividend payment, cash used in the first half of 2023 was EUR 127 million. At the end of June, RTL Group had net debt of EUR 702 million. Our net debt to adjusted EBITA ratio stands at 0.76x. For the business review, I will now hand over to Elmar.

Thank you, Bjorn. Let's look at our most important businesses in greater detail. I will start with RTL Deutschland on Slide 11. In the first half of 2023, our largest unit, RTL Deutschland, continued the dynamic growth of its streaming service RTL+, with paying subscribers up 31% year-on-year to about 4.5 million. We are in the process of launching our multimedia app comprising video, music, podcasts, audio books and magazine content in one single app. Our German family of channels is a clear market leader. RTL Deutschland reported a combined average audience share of 27.6% in the target group of years aged 14 to 59, extending the lead over our main commercial competitor, ProSiebenSat1, [indiscernible] to 5.8 percentage points. Our main channel, RTL remained the market leader in Germany in the target group with an average audience share of 9.8%. This made RTL the only major TV channel in Germany with growing audience share in the key target group in the first half of 2023. For the first time, Vox has become the second largest commercial channel in Germany, both in terms of key commercial target group as well as total audience share. With this, RTL Deutschland has achieved a major strategic target. RTL and Vox are now the #1 and #2 commercial channels in Germany in the target group 14 to 59. In July, Vox has even overtaken position in the younger target group of years aged 14 to 49. In terms of programming investments, we have renewed exclusive broadcasting and streaming rights for the UEFA Europa league and the UEFA Europa Conference League until the season 2026-2027. The reorganization of our publishing business is well underway. Thomas will give you an update on that later. Looking now at the financial of RTL Deutschland in the first half of 2023. In the reporting period, the German net TV advertising market was estimated to be down between 13% and 14%, with RTL Deutschland performing slightly better than the market. Total revenue of RTL Deutschland was down 5.6% to EUR 1.17 billion due to significantly lower TV and print advertising revenue. This was partly compensated by higher streaming revenue. Adjusted EBITA declined EUR 191 million to EUR 16 million due to lower TV advertising revenue and higher Streaming start-up losses. In addition, the adjusted EBITA for the first half of 2022 included a positive effect of EUR 35 million from the reversal of provisions relating to the legal proceeding with RTL Zwei. Moving now to M6 on the next slide. French net TV advertising market was estimated to be down between 8.5% and 9.5% compared to the first half of 2022. Total revenue of Groupe M6 was down 6% to EUR 622 million, mainly due to lower TV advertising revenue and scope effects. Accordingly, adjusted EBITA decreased by 7.4% to EUR 138 million. The adjusted EBITA margin remained high at 22%. The French media authority, Arcom, announced in April that M6 has been reallocated to digital television channel 6 for the next 10 years. Groupe M6 has secured several attractive sports rights to boost audiences for its linear TV channels and for its Streaming service display. This includes large measures from the current women's football World Cup in Australia and New Zealand, the Rugby World Cup this autumn in France, and starting this September, the NFL, including the Super Bowl. As reported last year, M6 acquired the rights to become the official free-to-air broadcaster for the finance of the UEFA Champions League in the years 2025 to 2027. These are all examples of our strategy to invest in premium content. Let's now turn to RTL Nederland on Slide 13. The Dutch net TV advertising market was estimated to be down by 6.8% in the first half of 2023. Following a record year in 2022, RTL Nederland's total revenue decreased by 5% to EUR 288 million in the first half of 2023, with higher Streaming revenue partly compensating for lower TV advertising revenue. This resulted in a lower adjusted EBITA of EUR 69 million, corresponding to a high adjusted EBITA margin of 24%. Our Streaming service, Videoland, grew its subscriber base by almost 18% compared to the end of June 2022. And the service was close to breakeven during the reporting period. These developments show that we are making significant progress on our defined path to profitability. The combined audience share of our Dutch family of channels remained at a high level of 34.3%, significantly ahead of the public broadcasters and part of it. Turning now to our global content business, Fremantle, on Slide 14. Our content business Fremantle increased revenue by 2.4%, exceeding the EUR 1 billion threshold for the first time in the first 6 months. Revenue growth was driven by scope effects from recent acquisitions. The business unit's revenue decreased slightly and 8% organically, mainly due to timing effects. Accordingly, Fremantle's adjusted EBITA declined to EUR 36 million. Fremantle has continued to produce critically acclaimed content at the highest level of quality. Fremantle productions have already won 60 awards in the first half of 2023 alone. I will now hand you back to Thomas, who will take you through the strategy update before presenting the outlook.

Yes, many thanks, Elmar, and sir, Bjorn. Let's turn to Slide 16. Our strategic framework remains unchanged based on 3 priorities, core, growth and alliance and partnerships. Core means investing in premium content, strengthening our families of channels as well as cost and portfolio management. Here, we see great opportunities with artificial intelligence. Today, we've already applied an AI scale and advertising planning has started to support content creation. Growth and growth areas are Streaming service, advertising technology and addressable TV as well as content production with Fremantle. And alliances and partnerships for national advertising sales consolidation, international advertising sales are aligned as well as joint investments in advertising, Streaming technology solutions via Smartclip and Bedrock. Moving to Slide 17. We remain convinced that market consolidation is necessary to compete with global tech platforms. That's why we remain recommitted to scaling up our TV and Streaming businesses. There are other ways to scale, not in one step as initially planned, but with a series of smaller steps. We're actively exploring 7 opportunities for advertising sales consolidation in our key territories. For example, we are currently in talks we the German TV channel RTL Zwei, in which we hold a minority shareholding to take over advertising sales for RTL Zwei at the beginning of 2024. This is subject to review by the German federal cartel office. Moving on to Slide 18 and looking at the publishing business of RTL Deutschland, which we are reorganizing to further strengthen our leading position and general stake relevance. As communicated earlier this year, we've taken our focus on the core brands of Stern, Geo, Capital, Brigitte and Gala. They account for around 70% of RTL Deutschland's publishing revenue in circulation. All other brands and line extensions are being sold or discontinued. The reorganization is progressing with the social plan. The redundancy package signed at the end of March 2023 and portfolio adjustments well advanced. The first disposals have already been announced and closed and we've finalized the sales process over the summer. With the reorganization, we reduced cost by EUR 70 million per annum by 2025, especially in corporate functions, IT and facility management. That will be reduced by approximately 700 FTEs. In addition, staff will be reduced in other RTL Deutschland businesses and 300 FTEs by 2025, bringing the total reduction to 1,000 FTEs. For 2025, we'll invest around EUR 18 million on transformation of our publishing brands, primarily in paid content and digital services. The combination of RTL Deutschland's TV Streaming and publishing businesses make sense to create value in the form of synergies of around EUR 75 million per annum in areas such as concentration, advertising sales, tech and data and corporate assumptions. Let's move to Slide 19 with more color on Streaming. With more than 6 million paying subscribers at the end of the first half of 2023, our subscriber base grew by 34% year-on-year, mainly driven by RTL+ in Germany. Streaming revenue for RTL+ and Videoland grew by 17% to EUR 152 million. In line with our targets, we've increased our compound spend by 27% to EUR 158 million in the first half of 2023, translating into Streaming start-up losses of EUR 87 million. Over the past months, major U.S. studios and content rights holders have restarted to license films and shows to international broadcasters and streaming services, partly reversing that strategy to resolve such content exclusively for their own streaming services. This development improves our access to premium content and it opens interesting opportunities for content partnerships. We've already clearly established RTL+ in [ Nederland ] as the leading national streaming services, which puts us in an excellent position for the necessary consolidation of the streaming market or markets in the next years. All in all, we are on track to reach our ambitious Streaming targets. In Germany, we have significantly increased the monthly prices for our premium packages. These price increases have been implemented in phases since March '23 without significant subscriber churn. That will increase the average revenue per user going forward. By 2026, we plan to increase our annual content spend to around EUR 600 million. On this basis, we aim to grow the number of paying subscribers for RTL+ and Videoland to 10 million, to increase our Streaming revenue to EUR 1 billion and to reach profitability by 2026. With both RTL+ and Videoland having successfully introduced hybrid business models consisting of various price packages, lower priced for free packages are predominantly or fully financed by advertising. This approach offers us much more flexibility compared to pure AVOD or SVOD approach. And while our Streaming business is growing strongly, we can increasingly reap the benefits of running 2 strong viewing platforms with our families of TV channels and our streaming services. Again, this brings important competitive advantages. Moving to Slide 20. As you can see, Streaming and linear TV address complementary viewer group. Let's look at the example of on a celebrity -- Get Me Out of Here, one of the most successful formats on our main channel RTL. The show performs very strongly on Streaming, reaching a much younger audience in the mid-30s. Generally speaking at RTL, TV and Streaming go hand in hand. We benefit from using one brand, the established brand, RTL, and from using successful TV formats to drive streaming inflow and usage. We source and shared content between TV and Streaming, which improves our access to content and positions us as a partner of choice for major studios and content right holders. We reduced our marketing spend to optimize our marketing spend across promotion and using TV advertising for our streaming services. And finally, our streaming services benefit from synergies across the group and streaming technology, in particular, and beyond video, via streaming. Moving on to our global content business, Fremantle on Slide 21. In the last years, Fremantle has become an even stronger, more creative, more diverse global content powerhouse, because in terms of geographic footprint and output across entertainment, drama and film and documentaries. Working with world-class storytellers and partnering with international directors and actors such as Angelina Jolie, Edward Berger and Richard Brown is key to the success of Fremantle. Fremantle has written an impressive growth story by expanding in the scripted business. By investing in the documentary business, Fremantle aim to replicate the success to become one of the leading producers of high-end documentaries. The company has already grown documentary output with 31 in 2021 to 80 in 2022 with 18 labels in 12 territories having local and global stories. This context, we confirmed the growth target for Fremantle to reach full year revenue of EUR 3 billion by 2025 despite increased seeing headwinds. To achieve this goal, we will continue to invest in Fremantle both organically and via acquisitions in all territories and across all content pillars. Let me finish by taking you through the group's outlook statement, on Slide 22. The geographical and the macroeconomic environment remain volatile. And the impact on RTL Group's businesses continues to be hard to predict. Although we are seeing first signs of market stabilization in Germany, in particular, we have adjusted our outlook for the full year 2023. RTL now expects full year revenue of around EUR 7 billion. We expect our adjusted EBITA to be around EUR 950 million, subject to stable to slightly growing TV advertising markets in the second half of 2023. We expect streaming start-up losses of around EUR 200 million for the full year and consequently, an adjusted EBITA before streaming start-up losses of around EUR 1.15 billion. RTL Group's dividend policy will remain unchanged. We plan to pay out at least 80% of the adjusted full-year net result. This brings us to the end of the presentation. Thanks for your attention. And we will now take your questions.

[Operator Instructions] And we have the first question from [indiscernible] with Societe Generale.

So my first question is on the ad trends. I think you said June and July in Germany were flat year-on-year. Do you have a first indication on September and also the other markets? My second question is on Fremantle. If you could give us an idea of where do you think organic revenue growth and margin also is going to be at the full year? And in that regard, can you maybe comment on how the actors strike in U.S. is impacting you? And I guess there's an argument to say that companies like yours, which are a bit more exposed to non-scripted content benefit at the moment because the streamers that are under pressure, could invest in that content. So do you see that? And then the last question just is on the Streaming losses. Do you have already an idea where Streaming losses may be next year?

Let's start with the ad markets, as Bjorn said, in Germany, our advertising revenues were flat in June and slightly down in July. We don't have a firm indication yet for September, nor for the full year. What we have are general macroeconomic trends. What we have are indications from agencies and advertising customers. But we also see increasing advertising bookings, and for some of our large customers increased commitments for the fourth quarter, in particular. And that leads us to conclude that the second half of the year could be up or advertising revenue could be in the tune of 0% to 2% up versus 2022. That would also apply to the German market. So what we're currently seeing from the German market is a plus of approximately 1% in the second half of the year. And that would mean that the full year would be broadly at minus 4% to minus 5%. That is more prudent than what you heard from ProSieben. So we hope that ProSieben is right and we are wrong. Would we apply the market expectation of ProSieben? We would not have had to adjust our outlook, right? But we believe that our assumption is not only more prudent, but also closer to reality. And I'd like to note that we are gaining market share in the German market. Fremantle this year will be broadly flat on revenue. Overall, the margin -- Bjorn, do you have a margin indication which we can share for this year?

Yes, similar to last year.

Similar to last year, absolutely. On the U.S. strikes, writers and actors, your assessment is correct, non-scripters is less affected than scripted. And European scripted is less affected than U.S. scripted. So our assessment is that our scripted business in the U.S. this year will not be impacted by the strike. It could be impacted next year for most slippages. Our European scripted business could potentially benefit. But that will depend on how long the strike lasts. Our non-scripted business could benefit. That's very clear. But we're not yet seeing -- I think clear to say, we're not yet seeing significant impact, neither positive nor negative. Streaming start-up losses, we're looking into this. We expect Streaming start-up losses next year, but that's really very, very first indication, to be slightly lower than this year, but not significantly as we continue to invest significantly in content in the tech platform. And in marketing, our strategy is very clearly to continue to grow the top line significantly. We want to get to the 10 million subscriber mark as soon as we can, because we believe that this would put us in a very, very strong strategic position in the necessary consolidation of the streaming market. Just by way of example, the 27 streaming services in Germany alone, I think it's pretty clear that not even half of these services will survive. And we see ourselves as a consolidator, not necessarily of the streaming services, but the potential of the content that is on these streaming services. And contracting, we're seeing quite a bit of move in the market already with partners approaching us to discuss partnerships. And that is on the basis that we have a clear #1 -- local #1 in the German market and the clear #1 in the Dutch market. We therefore think it makes strategic sense despite headwinds to significantly invest in the business. Bjorn, maybe on other markets, I mean, France and the Netherlands, in particular, on advertising?

Yes. So in France, we expect the Q3 to be up, Q4 around stable and then kind of similar to Germany, slightly up for the second half. In the Netherlands, we are seeing a slight decline, obviously a clear decline in the second half and that is mostly driven by the end of the gambling on TV.

The next question is from the line of Julien Roch with Barclays.

My first question is on programmatic. Why it deal with the Trade Desk which will take 20% of your hard earned revenue rather than do it direct and developing your own technology? I mean ITV is Planet V and is going direct. That's my first question. The second one is on Germany. You said you were getting share. But how much and what do you think will be the impact of, say, this year and next of having RTL #1 and Vox #2 in terms of market share gains? So ProSieben was down 10.3% in the first half in Germany -- Austria and Germany speaking, Switzerland. How much were you down on a net basis in the first half? So that's my second question on market share. And then the third one is, could we get the total consumption for your program in Germany? Last year, in the first half, it was 10.6 billion hours with 391 million being nonlinear. Could we get this a number for the first half of '23?

On consumption first?

Yes. The minutes from the first half of 2023, we had 10.276 billion minutes of that 104 million nonlinear and 9.872 as result of the linear consumption.

Yes. Then, on RTL #1 and #2 commercial channels, I mean, as we said before, we are widening the audience gaps and vis-a-vis putting. We're now 5.8 percentage points in the commercial, targeted [indiscernible] continuously increased in the last years. In terms of advertising, our view on the first half is that we've gained advertising market share in Germany. I'm not talking about Switzerland, and I'm not talking about Austria. Bjorn, do you have a precise number?

Yes. I think you referenced the ProSieben TV core advertising development in the first half that was down minus 13%, and we were down minus 12% in Germany, so slightly gaining share.

Concerning Trade Desk, you're right. We're using or working with Trade Desk for international bookings just for the TV, but not for national bookings. For national bookings we're using our own technology and therefore, keep the tech fees in-house. This has been our strategy for many years. As you know, I'd say among the very few European broadcasters of our own advertising technology with all key components in which we invested significantly in the last years, which we use [ our ] [ approve ] at the RTL group, at which we are also licensing to third-parties. So that's our philosophy. It's in line with the ITD philosophy.

So just on that, so you're using a Bedrock for programmatic, I suppose, for the whole RTL Group. And so, what broadly the split in international booking, national booking?

I don't have this. We'd have to come back to you, but international bookings are fairly limited. Now we're using the Smartclip technology and the U.S.-based technology on the advertising side. Bedrock is our streaming technology, which has been developed by M6.

The next question is from the line of Thomas Singlehurst from Citigroup.

2 questions, actually. One, I just really want to double check why the full year guidance is coming down to the extent that -- is it just because of that slightly less optimistic outlook for advertising in the second half? Or what are the other factors? That would be great if you can just really clarify what's driving a reduction on the revenue given the first half looked okay? Second question is on Streaming. I mean, obviously, elsewhere -- and I'm particularly talking about Viaplay. Some companies are seeing troubles. So your performance in Streaming a little more impressive than that. I'm just interested in what you think is driving differential? And also whether -- when you talk about consolidation, potentially picking up for the premium sports base, streaming might be something that might be interesting if there's a shakeout in that space?

Yes Well, listen, the guidance and the revised guidance really due to our advertising market expectations. And you're right. The first half came in broadly in line with our external expectations and the assumed phasing of our performance in 2023. It was not a surprise. But the advertising markets were weaker than we thought. The German TV advertising market was significantly weaker. So we compensated part of this by cost management. We quite simply don't see and are looking at our respective businesses, the half year results. The full year, the run rate, the cost base, the ad markets, the performance of prior year that we could come out at significantly more than EUR 950 million on the basis of advertising markets being at 0% to 2% in the second half of the year. As I said, a few weeks ago, I probably said I'd be more optimistic for the second half of the year. But what we've seen since then is a third quarter which is not as good as we saw, as we said before. June flat. I mean we were more than 0 gaining market share, July, I believe Germany down minus 3% or something. I think gaining market share, August down by approximately minus 10%, which is a real disappointment. Now in September, it's a very small month, but clearly we would like to continue the trend of June and July. We don't have much visibility on September, yet in September is 50% of advertising in the third quarter. So to be honest, we prefer to be prudent. But looking at things differently, I mean, EUR 950 million EBITA for full year means EUR 700 million in the second half of the year. That would mean that we would have to repeat the EBITA performance of 2017 in a market which is down significantly. Just context, right. The German television market in the first half of the year 2023 is 25% below 2019, 25%. It's by far the weakest of the large advertising market in Europe. Looking at it positively, you could say that this is the market which has the highest potential for recovery. But right now, we don't see significant or strong signals for recovery. So we prefer to be prudent. As I said, if the markets were up 4% in the second half of the year, then our EBITA will come out and at within the range, which we originally provided in March. But we prefer to be prudent, I think, and realistic as we have been, and therefore made the slight revision of our EBITA outlook. On Streaming, I think -- I mean -- I think it's impossible to compare to Viaplay, I mean, for all the reasons I just mentioned. I mean, we are -- I mean -- and this has been our strategy from the beginning. We focused our Streaming businesses on the market in which we are strong, in TV, where we have strong brands, where we have access to content, where we can source content jointly, as I said before, where we can work with partners with strong advertising sales, I can say. So I'd say we're really sticking to our knitting. We're running TV and streaming hand-in-hand. I would never, never launch a streaming service in a country where we don't have a TV footprint. I wouldn't do that. I think it would be far too risky. So our Streaming strategy is based on a local approach country-by-country cooperation where it makes sense. But as I said, running TV and streaming hand-in-hand, and therefore, benefiting from our strength in TV and bringing that step by step to our Streaming business. The other big element in Germany, in particular, is our partnership with Deutsche Telekom and the bundling of our Streaming service with Magenta [ TV ]. So looking at the 4.5 million subscribers in Germany, approximately 60% come via the Deutsche Telekom partnership, which is mutually beneficial. So that's the way we look at the market. Sports rights are highly attractive. I mean, no doubt, both in TV and in Streaming -- in TV, in particular, one of the biggest drivers of audience and TV usage, and increasingly so exactly as in the U.S. with the networks. So we have increased our investments in sports, life and in football, in particular in Germany and in Hungary. We start broadcast and stream the NFL in Germany starting in September, which we believe will be a huge success. And we'll report back on this. But it's also fair to say that sports rights come at huge prices because of the competition, because of the attractive characteristics of the rights, which I just shared with you. So it's a very, very competitive market. And in Germany, in particular, unfortunately, we are very often outbid by the public service broadcasters and sports right, who use their huge budgets in a tune of almost EUR 10 billion, which is almost secured because it's based on households payment. They used to outbid on sports rights, which we believe is problematic from a competition point of view, but it is a reality.

The next question is from the line of Nizla Naizer with Deutsche Bank.

I have 3 questions on my side. The first one on RTL+ the multimedia app. Previously, you mentioned that technology-wise, it was a bit challenging to bring all of these different platforms together on one sort of single app. How has that progressed? Has that been solved now? And [ can you ] give us a bit more color on the time line and what you expect from the multimedia app? The second question is on the EBITA outlook for H2. Are you seeing conversations with some certain sectors being more promising than others, certain sectors more weak than anticipated going into H2? Could you give us some color as to how that's looking in terms of sector breakdown? And the last is on the AVOD versus SVOD strategy. I mean, what we're hearing, I mean, here in the U.K., for example, is that advertisers would love to get their hands on sort of AVOD content that they could advertise because it's high-quality video sound on kind of advertising. Is that what you're seeing in terms of the competition you have in Germany? Would that change how you view AVOD versus SVOD in your own RTL+ kind of approach? Any color there would be great.

Well, on the [ NBA ], the good news is that we have solved the technical challenges and we are launching the [ NBA ] as we speak. The web offer has already been launched last week. We are launching the mobile offer on iOS and Android this week and we'll launch the big screen later this year. So the multimedia app has been a real challenge. But we believe it provides a great experience to our customers. We launched a significant marketing campaign later this year. And frankly, we have high hopes concerning consumer interest and pricing. I mean, it's a multimedia experience and the objective is to personalize that multimedia experience. The personalization will, of course, improve as more data becomes available on the consumption patterns of the users and experience, as I said, within time and that's become more personal. On AVOD and SVOD, I mean, as I said, our approach from the beginning in Germany and also in the Netherlands had been hybrid, so combining which is the best of SVOD and AVOD. It's fair to say that in both countries, our current assumption is that the primary revenue source will be SI subscription and not advertising. But to be honest, who knows. We'll see what the market demands. We'll see what Netflix and others do with the hybrid offers. I think the initial experience was not great, but I think they're picking up. So we're going to watch this very, very closely. At the end of the day, what I'm interested in is maximizing revenue per subscriber. And when the revenue comes from the subscription advertising frankly doesn't matter. It's going to be a combination for many of our customers. So as I said, we are -- I mean, both elements are included in the packages which we offer to the market. The primary revenue source right now is subscription, but so we see significant opportunities for advertising. And I confirm what you could say, there's a huge demand out there, both for addressable but also connected TV advertising inventory. So it would be easy to sell that. But we'll have to see what it needs for revenue per subscriber and the trajectory and the profitability -- cost profitability for the business. But it's something which is very much on agenda. Sectors, yes, Bjorn?

Yes. On sectors, first one, what have you seen in the first half across our footprint, the 3 main factors that stand out, it can increase their spending was the tourism, cleaning and also automotive, which has been a little bit of a [ laggard ] in the last few years, down versus prior years services, food and retail. With regards to the second half, I'd say it's a little bit speculative what sectors will perform better or worse. But as Thomas said earlier, we're seeing first signs in terms of bookings, but also conversations with agencies and large clients point towards a stronger Q4.

[Operator Instructions] There are no further questions. And I would like to Oliver Fahlbusch for closing comments.

Yes. Thank you very much for your interest in RTL group and our half year results. We are available throughout today to take any further questions. But apart from that, we wish you all a good day and a good summer.

Thank you very much. Thank you and speak soon.

Ladies and gentlemen, the conference has now concluded, and you may disconnect. Thank you very much for joining, and have a pleasant day. Goodbye.