European commercial broadcasters must diversify

Multichannel services, new advertising formats and new direct business partnerships between content providers and advertisers are posing a tremendous threat to the core business of European commercial broadcasters, according to the Yankee Group.

As a result, European free-to-air (FTA) broadcasters are facing a severe decline in advertising revenue. To retain these budgets and margins, European broadcasters must refocus their traditional business models and explore new and emerging TV distribution and merchandising options, according to the Yankee Group.

The conclusions are part of the recently published Yankee Group DecisionNote “European Commercial Broadcasters Must Diversify to Retain Advertising Revenue.”

FTA broadcasters also face significant cost pressure from analog switch-off and the transformation to digital transmission. On average, only 30 percent of most European broadcasters' revenue comes from channels other than advertising. In today's on-demand world, European broadcasters should begin exploring alternative broadcasting methods to generate greater revenue.

Other Yankee Group findings include:

  • Even with lower production costs, the demand for HDTV is on the rise. To compete in a pan-European or global market, production houses should engage with global brands that have restrictions in their core markets to develop global entertainment programs.
  • Diversification of European regulatory branches is no longer contemporary. Yankee Group finds that regulators should not try to stop what is already in their markets.

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