TV Production Market in Europe and North America: 2016

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Published: January 2016
Pages: 217
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Description

About this report

The report covers the TV Production Market in Europe and North America. There is particular focus on nine of the largest markets: France, Germany, Italy, Poland, Netherlands, Spain, Sweden, the UK and the US with other markets covered in overview.

This report is available for immediate download. Separate reports covering each of the major countries individually are available on request.

The price includes a follow-up conference call with the Apex Insight team to discuss findings and go through any questions you may have on areas such as report methodology, definitions, inputs to our forecast model and alternative scenarios.

Why is it important?

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.

The TV production market 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 industry is currently going through a wave of consolidation, both within production and between production companies and broader media groups. Recent deals, such as the mergers between Banijay and Zodiak merger, Endemol / Shine / Core and ITV and Talpa, have seen the leaders strive to match each others’ reach and capabilities, and large global media groups gain an increasing presence in the industry.

The report aims to analyse these and other trends to produce estimates of current market sizes, forecasts of likely growth and a view of how the key trends might play out.

We quantify the size of the TV Production markets across Europe and North America and in each of the nine 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 and OTT, the impact of cord-cutting in different markets, 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 useful for?

TV production companies
Broadcasters and television networks
Other media groups
Investors in these sectors
Banks, analysts, consultants and other advisors
Market regulators and policymakers

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 combined TV production market size in nine major European and North American countries (France, Germany, Italy, Netherlands, Spain, Sweden, UK, US) is now over €26bn in value, having grown at a CAGR of 2.3% since 2009

We estimate that the other countries within Europe and North America account for a further €4.5bn (€3.7bn for smaller European countries and €0.8bn for Canada)

Growth has been strongest in the US, UK and Sweden. The US has been driven by stronger growth in TV advertising revenue than in Europe. The UK has seen increasing spending by its pay-TV sector. Sweden saw strong market growth from 2009-13, driven by an advertising recovery, followed by more patchy recent performance.

The market has decreased in size since 2009 in some countries. In Spain, as a result of the economic crisis which has severely impacted TV industry revenue, and in Poland and the Netherlands, which both have mature cable sectors undergoing consolidation.

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 contribute to the commercial success of a format.

Competitive landscape

In recent years, there has been significant consolidation:

– Within the TV production market, as the super-indies such as Endemol Shine Core and ITV Studios have developed their networks
– Between production companies and other media groups as organisations such as Discovery, Liberty Global, Warner Bros and 21st Century Fox have seen the importance of owning production companies to their strategies.

Nevertheless, the market remains relatively fragmented with no group having a global market share approaching 15% and there is also a long tail of smaller independents in most countries.
Following its merger with Shine and Core, Endemol has regained leadership from Fremantle and now has revenues of almost €2bn

The new Banijay Group (incorporating Zodiak) has revenues of around €800m, putting it into an industry ‘big 5’ which are significantly larger than other groups.

EBITA margins of the leading players are typically around 10% with ITV Studios being significantly more profitable.

Country comparisons

Despite the international consolidation of production, there remain clear differences between the country TV production markets.

Viewing levels are significantly higher in the US than in Europe. Within Europe they tend to be higher in the south and east. Of the main countries, they are lowest in Sweden and the Netherlands.

The funding structure of the television industry varies considerably. While all the European markets have some degree of licence or other public funding, the US does not. Levels are highest in Germany, France and the UK, giving those markets greater stability.
Subscriptions account for the majority of TV industry revenues in the US, Poland and Sweden, where there are large cable segments. Pay-TV penetration is over 70% in those markets, plus the Netherlands. Elsewhere, it is under 60%

Other countries, such as Spain and Italy, are more dependent on, and hence exposed to fluctuations in, advertising revenue.

While cable is the most important pay-TV platform in most countries, there are differences:

– Satellite is the main platform in Italy, which lacks the network infrastructure to support cable; the UK, where the market has been driven by BSkyB and Poland.
– IPTV has the largest share in France and Spain, driven by the investments in network infrastructure and service development made by France Telecom and Telefonica.

In some countries, such as Denmark, the UK and Germany, public broadcasters retain a leading role in commissioning content while in others, privately owned channels are prominent, including four groups (RTL, P7S1, MTG and CME) which operate in several European markets.

Outlook

We expect to see ongoing TV production market growth, driven by a more positive economic outlook and expectations of higher growth in TV advertising revenues. The combined rate across all nine leading markets is likely to be slightly slower than in the past.

– We expect growth to be higher across the eight leading European markets but the overall trend is shaped by the performance of the very large US market.
– Here, growth is expected to be slightly slower than in the past as the networks continue to lose audience and advertising share and cable faces disruption to its business model from OTT competitors.
Key risks to the forecasts include
– Delay to, or even reversal of, economic recovery,
– Change in viewing habits leading to less viewing or shifting to models which do not carry advertising
– Faster trend towards cord-cutting than currently appears likely leading to falling pay-TV revenues
– Weakening of the European public broadcasters leading to a shift from commissioning to acquisition of imported programmes
– Failure to replace some hit shows which are now ageing.

Introduction 2
About this report
Summary
About Apex Insight
Contents
List of charts and tables

Market definition, characteristics and trends 12
Definition
Market seasonality and cyclicality
Programme genre trends
Customer segments
Customer segment trends
Traditional and new sources of revenue
New programme funding models (deficit financing)
Market consolidation, super-indies and major media groups
Impact of trends on the formats
Impact on different markets

Market size 23
Market size and growth
Viewing levels
Macroeconomic environment
TV industry Revenue
Advertising
Subscription
Licence fees and government funding
Price trends

Comparison of leading markets 29
Market size and growth
Viewing levels
Macroeconomic environment
TV industry Revenue

Forecasts  34
Market driver forecasts
TV production market forecast by country
Summary of forecast changes
Risk to the forecasts

Competitive landscape  41
Competition can be split into four main, but overlapping, categories
Revenue and profitability comparison
Historical revenue trends
Content libraries
Geographical presence
Value drivers for TV production companies
Summary of leading global super-indies
Profiles of leading TV production companies
All3Media
Banijay Group
Endemol Shine Core
FremantleMedia
ITV Studios
Red Arrow Entertainment Group
Tinopolis
Warner Bros International Television Production

Leading country markets 80
France 81
TV market overview
Market size
Production companies
Forecast
Key market data

Germany 95
TV market overview
Market size
Production companies
Forecast
Key market data

Italy 108
TV market overview
Market size
Production companies
Forecast
Key market data

Netherlands 121
TV market overview
Market size
Production companies
Forecast
Key market data

Poland 132
TV market overview
Market size
Production companies
Forecast
Key market data

Spain 142
TV market overview
Market size
Production companies
Forecast
Key market data

Sweden 156
TV market overview
Market size
Production companies
Forecast
Key market data

UK 168
TV market overview
Market size
Production companies
Forecast
Key market data

US 180
TV market overview
Channels
Networks
Pay-TV
Market size
Production companies
Forecast
Key market data

Other markets 204
Size and growth
Characteristics
Austria
Belgium
Bulgaria
Croatia
Czech Republic
Denmark
Estonia
Finland
Greece
Hungary
Ireland
Latvia
Lithuania
Luxembourg
Norway
Portugal
Romania
Serbia
Slovakia
Slovenia
Switzerland

Appendix 215
List of abbreviations

List of charts and tables

Leading international broadcasting groups
Market size and growth, 2009-15 / €m
Average TV viewing levels in leading markets / minutes per day
Nominal GDP % change in Europe
TV revenue split by segment / €m
Subscription TV households by segment
Average programme cost per hour broadcast (main five UK terrestrial TV channels) / €'000
TV production market size and growth by country / €m
Viewing levels by country, 2008 & 2013 / minutes
Nominal GDP (local currency): compound annual % change by country
TV Industry revenue growth by country / compound annual % change
TV industry funding structure by country
Licence fee per year in 2015 / €
Pay-TV penetration by country / % of households
Composition of pay-TV subscriber base by country / % pay-TV revenue
Nominal GDP: aggregate forecast % change across 9 countries
Nominal GDP (local currency): forecast compound annual % change
TV industry revenue forecast growth by segment / €m
TV industry revenue forecast growth by country / €m
Market forecast by country
GDP, TV industry revenue, TV advertising and TV production market: forecast annual % changes
Revenue of leading groups, latest year / €m
EBITDA margins of Leading groups, latest year / %
Historical revenue trends of leading groups / €m
Content libraries of the leading production groups and studios / ‘000 hours
Geographical coverage of leading super-indies
Summary of leading global super-indies
All3Media Holdings Ltd revenue by region / %
All3Media Holdings Ltd historical revenue / €m
Banijay historical revenue / €m
Endemol Shine Core Group revenue breakdown / % (est)
FremantleMedia non-scripted hours broadcast in main markets
Fremantle revenue / €m and % of RTL Group revenue
ITV Studios historical revenue / €m
ITV VoD Viewing by Platform 2013, %
ProSiebenSat1 historical revenue / €m
Red Arrow genre output 2013 / %
Tinopolis historical revenue / €m
Warner Bros, historical television licensing revenue / $bn
Eyeworks historical revenue / €m
France
Average daily viewing figures / minutes per person
TV Audience Share, 2014 (Excl. Pay-TV), %
TV Production market size and growth / €m
GDP, Advertising and TV Production revenue / annual % changes
TV Licence cost per year / €
TV industry funding structure / €bn
TV industry funding structure - France vs 9-country average / %
Largest production companies by number of hours
France GDP, Advertising and TV production forecast annual % changes
TV Production forecast market size and growth / €m
Key market data
Germany
Average daily viewing figures / minutes per person
2014 Audience Share by German Channels, %
TV Production market size and growth / €m
GDP, Advertising and TV Production revenue / annual % changes
TV Licence cost per year / €
TV industry funding structure / €bn
TV industry funding structure – Germany vs 9-country average / %
Largest production companies by number of hours
Germany GDP, Advertising and TV production forecast annual % changes
TV Production forecast market size and growth / €m
Key market data
Italy
Average daily viewing figures / minutes per person
2014 Audience Share of top 17 Free-to-Air Channels, %
TV Production market size and growth / €m
GDP, Advertising and TV Production revenue / annual % changes
TV Licence cost per year / €
TV industry funding structure / €bn
TV industry funding structure – Italy vs 9-country average / %
Italy GDP, Advertising and TV production forecast annual % changes
TV Production forecast market size and growth / €m
Key market data
Netherlands
Average daily viewing figures / minutes per person
TV Production market size and growth / €m
GDP, Advertising and TV Production revenue / annual % changes
TV industry funding structure / €bn
TV industry funding structure – Netherlands vs 9-country average / %
Netherlands GDP, Advertising and TV production forecast annual % changes
TV Production forecast market size and growth / €m
Key market data
Poland
Average daily viewing figures / minutes per person
TV Production market size and growth / €m
GDP, Advertising and TV Production revenue / annual % changes
TV industry funding structure / €bn
TV industry funding structure – Poland vs 9-country average / %
TV Licence cost per year / €
Poland GDP, Advertising and TV production forecast annual % changes
TV Production forecast market size and growth / €m
Key market data
Spain
Average daily viewing figures / minutes per person
TV Production market size and growth / €m
GDP, Advertising and TV Production revenue / annual % changes
TV industry funding structure / €bn
TV industry funding structure – Spain vs 9-country average / %
Production company revenues
Spain GDP, Advertising and TV production forecast annual % changes
TV Production forecast market size and growth / €m
Key market data
Sweden
Average daily viewing figures / minutes per person
TV Audience Share, Sweden, %
TV Production market size and growth / €m
GDP, Advertising and TV Production revenue / annual % changes
TV industry funding structure / €bn
TV industry funding structure – Sweden vs 9-country average / %
TV Licence cost per year / €
Sweden GDP, Advertising and TV production forecast annual % changes
TV Production forecast market size and growth / €m
Key market data
UK
Average daily viewing figures / minutes per person
TV Production market size and growth / €m
GDP, Advertising and TV Production revenue / annual % changes
TV industry funding structure / €bn
TV industry funding structure – UK vs 9-country average / %
TV Licence cost per year / €
UK GDP, Advertising and TV production forecast annual % changes
TV Production forecast market size and growth / €m
Key market data
US
Average daily viewing figures / minutes per person
TV industry funding structure / €bn
TV industry funding structure – US vs 9-country average / %
Pay-TV quarterly subscriber growth, 2006-15 / % quarterly change
TV Production market size and growth / €m
GDP, Advertising and TV Production revenue / annual % changes
US GDP, Advertising and TV production forecast annual % changes
TV Production forecast market size and growth / €m
Key market data

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