15 APR 2024

Streaming Wars: USA majors and European broadcasters fight back

A report by the European Audiovisual Observatory revealed that, although U.S. powerhouses continued to grow their weight in 2022, European players saw a larger growth during this year.

15 APR 2024

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The accumulated operating revenues of the top 100 audiovisual groups in Europe grew twice as fast in 2022 (+23% as compared to 2016) as the AV service revenues for the overall market and at a higher pace than that of average inflation, as reported by the European Audiovisual Observatory.

This evolution was mainly organic, with 90% of the growth accounted for by the private sector and almost entirely concentrated on the top 20 private groups. Pure SVOD players alone, such as Netflix, Amazon Prime Video, DAZN and Apple TV+ fueled the top 100 player dynamic: Their accumulated revenues grew by a factor of 6 in 2022 compared to 2016.

In contrast to the overall evolution of traditional market segments, in the top 100, revenues of primarily traditional players also registered an increase (+14% over 2016) driven mainly by Warner. Bros Discovery, Paramount, Comcast’s Sky, Disney, Vodafone, and Deutsche Telekom. In part, this evolution might also be explained by a stronger dynamic in revenue streams generated outside traditional AV service activity.

These developments saw the private share in general and U.S. weight in particular go up in 2022 over 2016. Among the top 100 players, private groups saw their accumulated revenue weight go up to 73% in 2022 (+4% over 2016). Broadcasters took the lion’s share (68%), followed by telco-driven companies (20%) and pure SVOD players (12%). Private sector revenues were almost equally banked by both European and US-backed players.

The weight of U.S. interests in the top 100 revenues went up to 36% in 2022 (+5% over 2016) due to the rise of the pure SVOD players, but also of the SVOD services of US-backed broadcasters such as Sky, Paramount+, HBO Max and Disney+. Up to 70% of U.S. interests were accumulated by broadcasters and 25% by pure SVOD platforms. Sky alone accounted for one third of revenues accumulated by US-backed players.

Concentration levels remained largely the same among the top 100 European AV groups by operating revenues over the analyzed period. The top 20 players accumulated 73% of top 100 revenues in 2022, a slight increase compared to the 71% registered in 2016. Regarding consolidations taking place among private players already present in the top 100, and organic growth, the strong are getting stronger.

In the pay TV market, the structure remained unchanged in 2022 with regards to concentration levels, private share, and U.S. interests, when compared to the previous year. Telco-driven players, as opposed to players driven by the edition of AV services arm, cumulatively accounted for over 70% of pay-TV subscriptions in 2022. This makes pay-TV business in Europe chiefly European-driven (81%) and almost entirely represented by the private sector (95%). With the top 10 operators cumulatively accounting for 60% of subscriptions at the end of 2022, the pay-TV market remained highly concentrated.

SVOD, the market segment with the highest share of U.S. (84%) and private interests (99%), was also the most concentrated, with 90% of subscriptions cumulatively signed off to the top 10 OTT platforms at the end of 2022. However, the concentration level across the top three players went down in 2022 compared with 2021 due to the plateauing of new additions registered by SVOD juggernauts, Netflix and Amazon. This happened against the backdrop of the smaller streamers scaling up, chiefly the platforms of the U.S. powerhouses which saw their cumulative subscriptions hike by +68% in 2022 over 2021. With OTT subscriptions signed off to European broadcasters also registering high dynamics (up by +41% in 2022 over 2021), the overall weight of broadcasters gained 9% (up to 40% in 2022), while the market share of pure SVOD platforms dropped to 57% in 2022 (down by -8% over 2021).

When considering all subscriptions signed off to top players owning - as opposed to only distributing - at least one prominent pay-TV channel or SVOD platform in 2022, US powerhouses contributed over half of the increment cumulated by the categories of players which registered growth. This saw the weight of U.S. powerhouses go up to 21% in 2022, adding +6% to their market share over 2021.

The European audiovisual landscape witnessed remarkable growth and transformation in 2022, driven predominantly by private sector initiatives, notably the surge of pure SVOD players like Netflix and Amazon Prime Video. The top 100 audiovisual groups experienced significant revenue increases, with traditional players adapting to new market dynamics alongside emerging digital giants. While concentration levels remained steady, the dominance of U.S. interests expanded, reflecting the global influence of American media platforms. Despite these shifts, European broadcasters continued to play a vital role, with pay-TV and SVOD markets showing resilience and diversity amidst evolving consumer preferences. As the industry evolves, consolidation among top players continues, emphasizing the adage that the strong are indeed getting stronger.