Turning Digital: From Television to Televisions - Annual Report - 17th Edition

The TV market revenues in Western Europe (EU15+CH+N) in 2018 finally bypassed the threshold of € 100 billion, totalling € 100.3 billion; compared to the € 98.3 billion in 2017, there was a 2% increase year on year. Even with an average inflation rate of 1.6% in 2018, there was a limited positive growth also in real terms.

This result comes from a context of strong differentiation on a country basis, reflecting also the persistent gap across the various economies. However, given a downturn in demand for the traditional entertainment services, a common trend in all the WE countries is the broadcasters’ move to the online sector, increasing content supply to serve a growing demand for non-linear services on many ways and different devices.

Pay-TV market continues to grow. While the last few years have witnessed a shift in the viewing preferences towards accessing content on-demand and on multiscreen mode, as a result, pay-TV still represents the largest part of TV income. In 2018 reached € 48.3 billion of revenues, +4.3% compared to the € 46.3 billion revenue in 2017. TV advertising reached € 30.6 billion, nearly stable compared to 2017, with a slight increase of 0.4%. Again, even if the mainstream TV adv is still losing shares, online adv showed higher growth that compensates for the losses of the former sector.

Market trends:

Consolidation and internationalization could be the key to European broadcaster success in the face of competition from global OTT players. A consolidation among regional broadcasters has been a key theme with the goal of making for an effective competition against global giants that are going to dominate not only online video streaming but also European pay-TV,

Another of the big challenges is the cooperation between broadcasters and global VOD players. On one hand companies like Netflix and Amazon are now much more eager to be involved in distributing shows after they have been broadcast and paying more upfront costs in order to be part of the project. On the other hand, broadcasters who are fine to partner with these new platforms are hesitant to give up control.

Most operators in Europe are feeling a little bit nervous about capital spending and uncertain about the business models, especially in the telco industry. Video is expected to be the “killer app” or at least the “first killer app”. Today 60% of mobile consumption is video and it will grow fivefold in the next four or five years. That is what is driving mobile broadband and fibre deployment. At the same time, people are watching more television and are radically changing viewing habits.

In this vision, 5G convergence with media and entertainment is strongly expected. More specifically, fueled by last year’s burst of M&A activity and the ongoing rise of mobile video, the sector is central to early industry business and use cases flowing from the first phase of the 5G standards.