European Broadcasters Face Up To OTT Challenge

Collaboration and internationalisation are the key to European broadcaster success in the face of competition from global OTT players.

Speaking at the Connected TV World Summit in a session entitled Living with FAANG (Facebook, Apple, Amazon, Netflix and Google), Richard Broughton, research director, Ampere Analysis, added that despite the FAANGs investing massively in content, European broadcasters are still able to differentiate their services from those of such players as Netflix and Amazon. However, this situation cannot be expected to last forever.

In his presentation, looking at European markets, Broughton said that as Netflix penetration increases beyond the 5-10% level, pay-TV uptake begins to fall. Beyond the 30% penetration mark, there are no countries where pay-TV penetration is still increasing.

Significantly, the same effect occurs in viewing, with there being a negative relationship between that for SVOD and broadcast.
Broughton highlighted the fact that globally OTT players now account for a third of all new commissions. Furthermore, Netflix had, as of January 2019, more new series in production/development (240) than any other company, with Fox (131) and the BBC (121) occupying second and third spots.

Broughton concluded by saying that European groups can address the threat posed by FAANGs by consolidating and/or collaborating to take advantage of collective scale. They should also use co-productions to share costs of high-end TV production and develop series and formats with international export in mind, to help support domestic production.―Broadband TV News

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