July 2014
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will more than double in the same period from 442 million in 2013 to 956 million devices by 2018. The increase in the number of consumers accessing and consuming digital products across an ever growing number of devices provides the television market with the perfect platform to grow its Online TV, OTT/ Streaming and electronic home video offerings, while also driving growth in the digital TV advertising market.
Shift in consumption habits towards ‘24/7 access’ and micro-transactions Alongside the growth in internet access penetration and devices, there has also been a notable shift in consumption habits towards ‘24/7 access’ and micro-transactions. Consumers expect to be able to access high quality and (where relevant) tailored content whenever it suits them. This shift has been refl ected by many businesses that have seen the need to adapt and develop consumer- centric business models. They have noted that the key to monetising the digital consumer is to adopt fl exible business models that offer more choice and better experiences. This has been epitomised by the rapid growth seen in ‘on demand’ services such as the electronic home video over-the- top (OTT)/streaming sector, and, in particular, the rise of streaming video company Netfl ix. Investors’ confi dence in OTT streaming services was underlined by the surging price in shares for Netfl ix in 2013. Its shares rose by almost 300 per cent in value during the year.
Key digital markets gaining critical mass Another aspect of growth in the EMEA broadcasting market is the fact that key digital markets are gaining critical mass. Fast growth rates in digital advertising, online TV and electronic home video were easy to overlook in the past because the revenues they generated were still very small. However, this is no longer the case in some key markets. A major tipping point was reached in 2013 in the home video market. After falling in 2011 and 2012, the market
cent over the next fi ve years. In the home video market, France will grow at an impressive nine per cent CAGR from 2013 to 2018, overtaking Germany in 2017 to become the second largest home video market in EMEA. It will generate total spend of 2.3 billion by 2018, behind only the UK which will grow at 3.7 per cent annually to reach 3.6 billion by 2018.
“While there appears to be a positive growth story for the broadcasting market in EMEA, not every country is expected to benefi t”
experienced growth overall as declines in physical home video revenues were being replaced by electronic home video revenues. Electronic home video represented 9.6 per cent of the EMEA home video market in 2009, but this more than doubled to 22.8 per cent in 2013 and is expected to reach almost 50 per cent by 2018.
EMEA broadcasting market Finally, it is important to note that growth of the EMEA broadcasting market is not evenly spread between Western Europe, Eastern Europe, the
Middle East and Africa, or even within these segments. Globally, key drivers for growth in entertainment and media are those countries where the internet access and device penetration have the opportunity to grow the fastest and this is consistent within EMEA.
In the TV advertising markets, Middle East and African countries are expected to grow at an average CAGR of 12.1 per cent, compared to three per cent in Western Europe, and seven per cent in Central and Eastern Europe. The picture
is similar for TV subscriptions and licence fees, while in home video, Central and Eastern Europe is expected to grow even faster than the Middle East and Africa, driven by the growth of the Russian home video market, which is expected to grow at over 20 per cent annually over the next fi ve years.
The big three players in the EMEA market, Germany, France and the UK, will all see much less spectacular growth rates. In TV subscriptions and licence fees, the three countries are expected to grow at a CAGR of between 1.4 per cent and 2.5 per
In TV advertising spend, the UK will see the fastest CAGR of the three countries over the next fi ve years, with 3.5 per cent annual growth expected. Here, though, the dominance of the ‘big three’ will be blown apart as France and Germany are overtaken by Russia in 2014 and 2018 respectively, a result of Russia’s large population, rapid growth of internet access penetration and the fact that TV is the only platform with truly national reach. Yet, while there appears to be a positive growth story for the broadcasting market in EMEA, not every country is expected to benefi t. Spain’s TV advertising and TV subscriptions revenue are both expected to decline over the next fi ve years. And other countries, including Ireland, Belgium, Finland and Holland could see declines in their home video markets. TV as a platform will also lose advertising market share in EMEA over next fi ve years. Total TV advertising spend will be overtaken by internet advertising spend as the largest EMEA advertising market segment in 2015.
The industry is still to make much progress on the issue of TV audience measurement. While digital audiences are easier to identify and track, the growth of multi-channel and terrestrial TV in EMEA highlights the importance of knowing who and how big the audiences are in order to monetise them effectively. Yet, it will be some comfort to all of those working in the industry that such issues are being addressed against a broad backdrop of growth over the next fi ve years. broadcasting market in EMEA, not every country is expected to benefi t.” broadcasting market in EMEA, not every country is expected to benefi t.”
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