08.07.2003 12:00 PM
European TV market to change dramatically by 2007

The development of digital television in Europe has increased competition for viewers and strengthened the position of pay-television providers in competition for advertising, thus threatening the traditional business model of free, over-the-air TV broadcasters, says a report released this summer from Datamonitor.

The report, “Broadcaster strategies for the new TV environment,” asserts that European broadcasters will increasingly feel profits squeezed as the supply of television advertising inventory in the aggregate outpaces the demand for commercial time as the number of digital television channels continues to swell.

At the same time, the establishment of large audiences for digital pay-TV services on cable and satellite has strengthened the hand of system operators so they can bargain for lower carriage fees, the report says, pointing out that multichannel broadcasters such as MTV and Nickelodeon could be forced to take 50 percent less in per-subscriber carriage fees and smaller broadcasters might lose such remuneration entirely.

According to the report, the individual channel approach of broadcasters will become obsolete and they will be forced to evolve their business strategies, increasing their scope and scale to survive. The proliferation of channels on digital cable and satellite will force smaller channels to merge or cease operations, it says.

Other findings and forecasts in the report include:

  • Half of Western European households will have digital TV by the end of 2007, as compared to 19 percent today;

  • In the United Kingdom, audience share for the five terrestrial channels will drop from 87 percent today to 66 percent by 2007;

  • Free over-the-air TV advertising will grow 4 percent from 2002 to 2007;

  • Multi-channel services will see 15 percent growth in ads during the same period;

  • Competition for audience will lead to spending on programming that will outpace ad growth;

  • Competition also will diminish the pricing power of broadcasters.

These developments will force broadcasters to operate as “integrated content brands,” the report asserts, which will deliver increased value to advertisers by letting them run targeted campaigns designed to appeal to the demographic of a channel.

Datamonitor specializes in industry analysis. Its Datamonitor Interactive TV team has focused on researching Europe’s television market for the past five years. For more information, visit www.datamonitor.com.

Back to the top




Comments
Post New Comment
If you are already a member, or would like to receive email alerts as new comments are
made, please login or register.

Enter the code shown above:

(Note: If you cannot read the numbers in the above
image, reload the page to generate a new one.)

No Comments Found




Thursday 10:05 AM
NAB Requests Expedited Review of Spectrum Auction Lawsuit
“Broadcasters assigned to new channels following the auction could be forced to accept reductions in their coverage area and population served, with no practical remedy.” ~NAB

Manor Marketing /   Tuesday 08:24 AM
aQ Broadcast Introduces New aVS Version 4 Firmware
Manor Marketing /   Tuesday 08:32 AM
aQ Broadcast Features aQ Production Suite at IBC 2014
Sue Sillitoe, White Noise PR /   Tuesday 11:50 AM
Prism Sound Releases SADiE Version 6.1

 
Featured Articles
News Technology
News Technology
Discover TV Technology