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Turning Digital - Pay TV at a Crossroads

  • ID: 3942397
  • Report
  • Region: Europe
  • 88 Pages
  • ITMedia Consulting
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By the End of 2015 the TV Market in Western Europe Reached €97.7 billion, at an Annual Growth Rate of  0.9%, Corresponding to 22.6% Growth in ten Years at a CAGR of More Than 2%


  • ESPN
  • Hulu
  • Netflix
  • Verizon
  • MORE

The 14th Annual Report, is an essential tool to understand the TV market and anticipate its changes. The first part analyzes the Digital TV in Europe, its trends and prospects. The second part focuses on content ubiquity and on the growing trend on the operators' side to adopt effective strategies to enter the new digital markets.

The development of the internet sector has been characterized by a massive surge in global video Internet traffic fueled by global increases in Internet users, personal devices and machine-to-machine connections, faster broadband speeds, and the adoption of advanced video services. In this scenario, the importance of online and mobile in particular will be of the utmost importance, and will keep growing dramatically. In this new landscape, consolidated entities in the Telco and TV sectors aim at offering quadruple play, integrating voice, data and Internet access and fixed and mobile video TV. Intuitively, what the consumers like best of triple and quadruple-play bundles, is the advantage and substantial saving of having access to the three or four core services they need. This is profoundly different from the traditional “pay-TV” concept of channel-bundling, in which up to hundreds of channels are sold in a single offer, a possibly expensive one, with severe lack of customization.

One of the solutions conceived by the traditional pay-TV operators, are the so-called “skinny” bundles, meant to win back consumers who are deciding to cut the cable for streaming video on-demand platforms like Netflix and Hulu, which are a fraction of the price of cable. The whole concept of churning the heavier – cost-wise- premium channels, to be able to offer to the consumers a range of customized packages that could be competitive in terms of ‘you pay what you watch’, finds obstacles in outdated distribution contracts (e.g the ESPN citation versus Verizon) but when succeeding, skinny bundles showed early success with cord-cutters while trying to reduce the presence of cord-nevers. A success story is for instance that of Sling TV. On the other side, OTT and online players have now access to stronger advertising resources. According to the researcher, today Internet online advertising is playing a leading role in the total advertising revenue mix.

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1. Preface

2. Executive summary
- The TV market in 2015
- Market trends

3. The TV market in 2015
- Market Overview
- Advertising
- Pay-TV
- The multichannel television market
- Multichannel advertising
- Fragmentation in TV audience

4. Market Trends: Catching-up with the online consumer
- Technology and the video content revolution
- Skinny bundling
- Online Advertising
- Toward a single audiovisual market?

List of Figures:

Figure 1. GDP in Western Europe (% change YoY)
Figure 2. TV market revenues in WE 2005-2015
Figure 3. TV market revenues
Figure 4. Advertising and pay-TV revenues
Figure 5. TV market revenue breakdown in Western Europe
Figure 6. TV advertising trends in the Big Five countries, 2013-2015
Figure 7. The advertising media mix in the UK
Figure 8. The advertising media mix in Germany
Figure 9. The advertising media mix in France
Figure 10. The advertising media mix in Italy
Figure 11. The advertising media mix in Spain
Figure 12. Breakdown of pay-TV by platform, 2011-2015 (HH, ‘000)
Figure 13. Pay-TV penetration in the Big 5
Figure 14. Total online TV industry revenue (£m)
Figure 15. Pay-TV revenues (million £)
Figure 16. Pay-TV penetration in the UK (2015)
Figure 17. Audience shares of main pay-TV operators in the UK
Figure 18. Pay-TV revenues in Germany (€ mln)
Figure 19. Tv channels by business model  in Germany
Figure 20. Breakdown of Pay-TV channels in Germany by genre (2016)
Figure 21. Pay-TV in Italy: penetration and players (market share)
Figure 22. Platform penetration in Italy
Figure 23. Evolution of pay-TV subscriptions in Spain (HH, million)
Figure 24. Pay-TV subscriptions in Spain
Figure 25. Evolution of pay-TV subs in Spain by operator (in ‘000)
Figure 26. Breakdown of pay-TV market by platform (2014 -2015)
Figure 27. TV market revenue breakdown (in billion €)
Figure 28. Multichannel TV revenues breakdown
Figure 29. Breakdown of TV ads investments in the UK
Figure 30. Breakdown of TV ads investments in France
Figure 31. Breakdown of TV ads investments in Italy
Figure 32. Breakdown of TV ads investments in Spain
Figure 33. TV viewing times (min/day, 2015)
Figure 34. Audience share in the UK, 2012-2015
Figure 35. Audience share in Germany
Figure 36. Audience shares per platform in France (HH, %)
Figure 37. Breakdown of TV channels in France by genre
Figure 38. Audience share in France (% points)
Figure 39. The multichannel audience in Italy (2014-2015)
Figure 40. TV audience share in Spain (%, 2015)
Figure 41. Mobile data traffic by non-smartphone device (Exabytes/m.)
Figure 42. Mobile data traffic (Exabytes/m.)
Figure 43. Regional Share of Smart Devices/Connections, 2015-2020
Figure 44. Bandwidth requirement per HH, by device type (Mbps)
Figure 45. Smartphone and Offloaded traffic (2015-2020)
Figure 46. Downstream Peak Traffic Composition in Europe
Figure 47. Evolution of main pay-TV cable subs in the US (in ‘000)
Figure 48. Internet advertising share in the Big 5
Figure 49. Online advertising categories
Figure 50. Totally online advertising spending in Europe (€bln)
Figure 51. Online advertising in Europe (€ billion)
Figure 52. Online display advertising in Europe (€ billion)
Figure 53. Costs of Ad-blocking
Figure 54. Content-windowing in the UK

List of Tables:

Table 1. Sky - UK key metrics 2013-16
Table 2. Sky – Germany and Austria key metrics 2013-2015
Table 3. Satellite and ADSL: Pay-TV offers in France, 2016
Table 4. Canal+ offer in France
Table 5. Sky – Italy key metrics 2013-2015
Table 6. Peak Period Applications – Europe, Mobile Access
Table 7. Main skinny bundle packages on the DISH offer
Table 8. Potential impact of geo-blocking

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  • ESPN
  • Hulu
  • Netflix
  • Verizon
  • MORE

Following a slow expansion of the economic activity during 2014, many European economies have continued on the road to recover also in 2015. Within this framework, the European TV market performed unevenly across countries, due to the deep disparities between the national markets in Europe.

Advertising spending represents the leading force in the TV market and is continuing the positive growth of the last two years. Instead, while still representing the largest slice of the market revenues, pay TV fails to restart, due to the ever increasing competition from online players and their aggressive price policies.

Internet TV content has now entered the traditional TV screen which at the same time lost its role as unique possibility to consume audiovisual content. Alternative ways of video consumption are expanding and the attention is no longer focused on one screen only. Consumers demand full control over media experiences and unrestricted access anywhere, any time and on any device.

In this context also broadcasters have started to take into consideration the exploitation of synergies between content and video delivery platforms, developing new digital competences. Online advertising has become an important resource in the mix of resources connected to advertising and in a few big ountries even the most important.

Turning Digital, the Annual Report now at the 14th edition, is among the most authoritative and broadest reports on the TV market and its main trends in Europe.

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- Hulu
- Netflix
- Verizon

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