Spending by video-on-demand (SVOD) platforms will reach €10 billion in Europe’s major TV markets in 2024.
The figure overtakes the investment made by the region’s commercial broadcasters in original and acquired content. London-based Ampere says the broadcasters are facing increased pressure on their own content budgets, and falling viewer engagement levels.
According to Ampere’s Media Consumer behaviour tracker, which conducts biannual interviews with 2,000 consumers, commercial broadcasters have seen an average 16% decline in consumer engagement across Europe’s big five markets since 2016. The result is a decline of nearly €1 billion in the linear TV advertising market over the past decade.
Neil Anderson, Senior Analyst at Ampere Analysis says: “Despite the short-term benefits of cutting costs during economic downturn, prioritising long-term investment in both content and streaming capabilities is crucial for commercial broadcasters to maintain prominence in Europe’s cut-throat TV market.”
The answer from the broadcasters has been to intensifying their focus on streaming strategies, even though their content spending budgets have reduced by 19% since 2016.
Ampere believes the next few years present a strategic opportunity for broadcasters amidst a slowdown in spending by the major streaming services. Investment by global streamers in European sourced content is forecast to grow by 8% year-on-year in 2025, compared to an average annual growth rate of 35% between 2021 and 2024.
Already industry giants including Netflix, Disney, and Warner Bros. Discovery are scaling back streaming spend growth to concentrate on profitability, opening up a window for local broadcasters.
However, Ampere warns that content spending strategies should not be the only consideration; broadcasters must also prioritise the transition of audiences to streaming to ensure their long-term relevance. This involves investing in their video-on-demand platforms, expanding content libraries, enhancing digital advertising capabilities, experimenting with content release strategies across linear and VOD, and tailoring content output to cater to younger demographics.
