About this report
The TV production industry has been forced to evolve as the television and entertainment industries have changed. New TV viewing platforms, such as IPTV have emerged alongside other forms of entertainment using tablets, smartphones and other fast-growing platforms.
At the same time, Europe, in particular southern countries such as Italy and Spain, has weathered an economic crisis which has put great pressure on industry revenues.
TV production has responded by becoming more international and more creative in exploring ways to derive revenue from its content – while maintaining creativity in producing new hit shows.
The report covers Europe. The Baltic states (Latvia, Lithuania and Estonia) are included but Russia and other states of the former Soviet Union are excluded. There is particular focus on eight of the largest markets: France, Germany, Italy, Poland, Netherlands, Spain, Sweden and the United Kingdom.
We quantify the size of the market across Europe and in each of the leading countries as well as historical growth rates and the factors which drive these figures. This includes analysis of television industry revenue and the factors driving it such as advertising spending, TV licence trends and pay-TV revenues – setting out historical trends and forecasts.
We also review and evaluate the impact of key industry trends such as development of new platforms such as IPTV, market consolidation and the growth of the super-indies, development of content distribution models, deficit funding and exploitation of new revenue sources such as digital rights.
Our forecast for industry growth by segment is based on this analysis of historical trends and our understanding of growth drivers.
Who is the report intended for?
TV production companies
Broadcasters and television networks
Investors
Banks
Consultants and other advisors
Governments and Regulators
What are the sources and methodology?
This report is based on
– Interviews with senior-level contacts in the TV and TV production indsutries
– In-depth analysis of the macroeconomic and legislative environments and relevant industry drivers
– Analysis of information on the leading TV production groups
– Our own experience of advising both companies and investors in the TV and TV production industries and the wider media sector.
Information from these sources has been synthesised and presented clearly and concisely with extensive use of charts and tables to illuminate points and support conclusions.
We have developed our own model of the market to evaluate the impact of trends and changes and underpin our market forecasts.
Summary
Market context
The European TV production market is now over €15bn in value, having grown in recent years despite the negative impact of the economic downturn.
Southern European markets have been under most pressure with cuts to production budgets in Italy and Spain with closure of the public broadcaster threatened in Greece.
Despite the development of new forms of entertainment such as games and other interactive content on smartphones, tablets and other platforms, TV viewing levels have continued to increase in nearly all countries with increased numbers of channels enabling niche focus being a factor.
New revenue models have continued to develop with the proportion of programme funding from the initial broadcaster decreasing as a consequence. Exploitation of the potential from international sales of finished content, licensing of formats, digital rights and success-based payments is important to the commercial success of a format.
Competitive landscape
The leading super-indies are FremantleMedia and Endemol. They have revenues of €1.5bn and €1.3bn respectively and we believe they are the only groups to have a strong presence in each of the leading eight markets which we cover in depth.
The industry has become far more international with the ‘super-indie’ production groups expanding via acquisitions and organically.
– However, it remains relatively fragmented with no group having a global market share approaching 10%.
– The in-house production divisions of the major broadcasters still retain significant shares in their respective home markets and there is also a long tail of smaller independents in most countries.
As the super-indies have developed their libraries of content they increasingly compete with Hollywood studios such as Disney, Warner Bros and Sony for finished programme sales
Country comparisons
Despite the international consolidation of production, there remain significant differences between the country markets.
Viewing tends to be higher in southern and eastern Europe and, of the main countries, is lowest in Sweden and the Netherlands.
The funding structure of the television industry varies considerably.
– Some countries, such as Italy, are highly dependent on, and hence exposed to fluctuations in, advertising revenue
– Germany and the Scandinavian countries have a far greater proportion of their format from far more stable TV licence fees.
– Others, such as France and the Netherlands depend to a far greater extent on pay-TV subscriptions.
In some countries, such as Denmark, the UK and Germany, the public broadcaster retains a leading role while in others, privately owned channels are prominent, including four groups (RTL, P7S1, MTG and CME) which operate in several markets.
Market sizes are related to the sizes of the economies, but there are some differences.
– For example, the UK market is somewhat larger than might be expected, in part due to the international premium on English-language content which means that its productions have greater export potential.
Growth rates have varied significantly with absolute falls occurring in southern European countries such as Italy and Spain, as well as Poland and the Netherlands.
Sweden and the UK have been the fastest growing of the larger markets. The smaller markets have also performed well as a result of the relatively strong economies, and strong currencies, in the Nordic countries, Switzerland and Eastern Europe.
Outlook
Most forecasters expect the economic situation across Europe to start to improve.
– This is likely to stimulate advertising revenue and reduce pressure on cable subscription renewals.
– In this environment, we expect to see growth across Europe as a whole but at a different rate in each country depending on the market structure, economic performance and other local factors.
Further market consolidation appears likely given that even the largest groups have gaps in their networks and several key players have recently been the subject of sale discussions
Key risks to the forecasts include lack of, or delay to, economic recovery, weakening of the public broadcasters leading to a shift from commissioning to acquisition of imported programmes, loss of advertising revenue as advertisers switch to the internet and a failure to replace ageing hit shows.
Contents
Market definition, characteristics and trends - 11
Definition
Market seasonality and cyclicality
Programme genre trends
Broadcaster trends
Traditional and new sources of revenue
New programme funding models (deficit financing)
Market consolidation and creation of super-indies
Impact of trends on the formats
Impact on different markets
Market size - 19
European TV Production Market size and growth
Viewing levels
TV industry Revenue
– Macroeconomic environment
– Advertising
– Subscription
– Licence fees and government funding
– Price trends
Comparison of leading markets - 24
Market size and growth
Market size and GDP
Price levels
Viewing levels
Industry revenue
Advertising
Licence Fees
Leading country market profiles - 29
France - 29
– TV market overview
– Market size
– Production companies
– Forecast
– Key market data
Germany - 38
– TV market overview
– Market size
– Production companies
– Forecast
– Key market data
Italy - 48
– TV market overview
– Market size
– Production companies
– Forecast
– Key market data
Netherlands - 59
– TV market overview
– Market size
– Production companies
– Forecast
– Key market data
Poland - 68
– TV market overview
– Market size
– Production companies
– Forecast
– Key market data
Spain - 77
– TV market overview
– Market size
– Production companies
– Forecast
– Key market data
Sweden - 87
– TV market overview
– Market size
– Production companies
– Forecast
– Key market data
UK - 97
– TV market overview
– Market size
– Production companies
– Forecast
– Key market data
Other markets - 107
– Size and growth
– Characteristics
– Austria
– Belgium
– Bulgaria
– Croatia
– Czech Republic
– Denmark
– Estonia
– Finland
– Greece
– Hungary
– Ireland
– Latvia
– Lithuania
– Luxembourg
– Portugal
– Norway
– Romania
– Serbia
– Slovakia
– Switzerland
Competitive landscape - 115
Overview
Summary of leading super-indies
Value drivers for TV production companies
Profiles of leading TV production groups
– All3Media
– Banijay Entertainment
– Endemol
– Eyeworks
– FremantleMedia
– Shine
– Zodiak Media
Forecasts - 132
Market driver forecasts
European TV production market forecast by country
Summary of forecast changes
Risk to the forecasts
Appendix - 138
List of figures (European TV Production Market Report)
1. Leading international broadcasting groups
2. European market size and growth, 2007-13 / €m
3. Average TV viewing levels in leading markets / minutes per day
4. European TV revenue split by segment / €m
5. GDP % change in Europe
6. Total advertising revenue (all media) – eight leading markets / €m
7. TV advertising revenue (all media) – eight leading markets / €m
8. Average programme cost per hour broadcast (main five UK terrestrial TV channels) / €'000
9. European TV production market size and growth forecast, by country / €m
10. TV Production market size vs GDP / €m
11. Viewing levels by country, 2007 & 2012 / minutes
12. TV funding structure
13. Advertising media segmentation by country
14. TV production market size vs TV advertising spend / €m
15. Licence fee per year in 2012 / €
France
16. Average daily viewing figures / minutes per person
17. TV Production market size and growth / €m
18. GDP, Advertising and TV Production revenue / annual % changes
19. TV industry funding structure
20. Advertising spending breakdown by medium
21. TV Licence cost per year / €
22. Largest production companies by number of hours
23. GDP, Advertising and TV production forecast annual % changes
24. TV Production forecast market size and growth / €m
25. Summary of key metrics
Germany
26 Average daily viewing figures / minutes per person
27 TV Production market size and growth / €m
28 GDP, Advertising and TV Production revenue / annual % changes
29 TV industry funding structure
30 Advertising spending breakdown by medium
31 TV Licence cost per year / €
32 Largest production companies by number of hours
33 GDP, Advertising and TV production forecast annual % changes
34 TV Production forecast market size and growth / €m
35 Summary of key metrics
Italy
36 Average daily viewing figures / minutes per person
37 TV Production market size and growth / €m
38 GDP, Advertising and TV Production revenue / annual % changes
39 TV industry funding structure
40 Advertising spending breakdown by medium
41 TV Licence cost per year / €
42 Largest production companies by number of hours
43 GDP, Advertising and TV production forecast annual % changes
44 TV Production forecast market size and growth / €m
45 Summary of key metrics
Netherlands
46 Average daily viewing figures / minutes per person
47 TV Production market size and growth / €m
48 GDP, Advertising and TV Production revenue / annual % changes
49 TV industry funding structure
50 Advertising spending breakdown by medium
51 GDP, Advertising and TV production forecast annual % changes
52 TV Production forecast market size and growth / €m
53 Summary of key metrics
Poland
54 Average daily viewing figures / minutes per person
55 TV Production market size and growth / €m
56 GDP, Advertising and TV Production revenue / annual % changes
57 TV industry funding structure
58 TV Licence cost per year / €
59 Advertising spending breakdown by medium
60 GDP, Advertising and TV production forecast annual % changes
61 TV Production forecast market size and growth / €m
62 Summary of key metrics
Spain
63 Average daily viewing figures / minutes per person
64 Number of subscribers to Pay-TV by transmission platform
65 TV subscription revenue / €m
66 TV Production market size and growth / €m
67 GDP, Advertising and TV Production revenue / annual % changes
68 TV industry funding structure
69 Advertising spending breakdown by medium
70 GDP, Advertising and TV production forecast annual % changes
71 TV Production forecast market size and growth / €m
72 Summary of key metrics
Sweden
73 Average daily viewing figures / minutes per person
74 TV Production market size and growth / €m
75 GDP, Advertising and TV Production revenue / annual % changes
76 TV industry funding structure
77 TV Licence cost per year / €
78 Advertising spending breakdown by medium
79 GDP, Advertising and TV production forecast annual % changes
80 TV Production forecast market size and growth / €m
81 Summary of key metrics
UK
82 Average daily viewing figures / minutes per person
83 TV Production market size and growth / €m
84 GDP, Advertising and TV Production revenue / annual % changes
85 TV industry funding structure
86 TV Licence cost per year / €
87 Advertising spending breakdown by medium
88 Largest production companies by number of hours
89 GDP, Advertising and TV production forecast annual % changes
90 TV Production forecast market size and growth / €m
91 Summary of key metrics
92. Other markets: size / €m
93. Geographical coverage of leading super-indies
94. Summary of leading super-indies
95. All3Media revenue / €m
96. Eyeworks revenue / €m
97. FremantleMedia revenue / €m
98. Shine revenue / €m
99. Zodiak Media revenue / €m
100 Europe GDP 2007 – 2017 / annual % change
101. Total advertising revenue (all media) forecast – eight leading markets / €m
102 TV advertising revenue forecast – eight leading markets / €m
103 European TV production market size forecast, by country / €m
104 GDP, Advertising and TV production forecast annual % changes
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