Market forces are creating a balanced European AV ecosystem - and it is booming [versión española]
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Oliver & Ohlbaum (O&O) has carried out an independent study into European AV media market trends to assess whether the current AV ecosystem requires new regulatory interventions, in light of ongoing policy debate in this area.
The paper focuses on a sample of territories across the EU single market: France, Germany, Italy, Spain and Sweden, and also considers the UK. The paper examines trends in demand from buyers in the market for the period 2015 to 2021, focusing on content spend (excluding news and sport). It considers trends in production from suppliers in the market to understand the size, structure and overall health of the European AV ecosystem. It also presents forecasts going forward to 2026.
Drawing on desk research, analysis of available third-party datasets, and O&O’s in-house knowledge and experience of the European AV sector, we have found:
Market forces in Europe are creating an equilibrium of local, regional, and global content and services.
On the buyer side, over the period 2015-2021 demand for content has been strong, with revenues growing or stable across both traditional TV and SVOD, while box office revenues are starting to recover from the pandemic.
On the supplier side, there is a vibrant mix of large and small producers, with high levels of European ownership among the leading companies by revenue, and good levels of profitability across independent production companies of all sizes. This mix of small and large companies supports production sector resilience, while competition for content across different investor types helps to further drive flexibility and variety of financing and IP (Intellectual Property) terms.
Over the medium term, total content spend by both Free To Air (FTA) and pay broadcasters is forecast to rise overall, though with some variation across the countries. SVOD investment is expected to grow substantially, driving the overall long term trend upwards and suggesting that SVOD spend is additive.
Looking across different territories in Europe, tighter local content regulation is not in itself a clear indicator of better outcomes in terms of content investment.
Considering these findings, it is not clear that new regulations around local content investment are needed to achieve the stated policy ambition of a resilient European AV sector in the digital age.
Click here to read our findings in full.
Comparison of selected health metrics in Sweden, Germany, UK, Spain, Italy and France:
The report was written by Oliver & Ohlbaum Associates Limited and commissioned and funded by Netflix. All opinions stated therein are those of the authors.