Turning Digital - Outside the comfort zone
XXI ITMedia Consulting Annual Report

Out today, 10 October

For over 20 years, Turning Digital, the Annual Report by ITMedia Consulting, has been analysing and anticipating the major transformations that have accompanied the evolution of Television in Europe.

This year there is no good news for the sector. After the collapse in 2020, mainly due to the pandemic, and the subsequent strong recovery in 2021, 2022 marks a stagnation in revenues, just +0.5%, which becomes a real rout if we consider an average inflation rate of 9.2%.

On the one hand, TV advertising (slightly decreasing compared to 2021) on traditional channels has not been growing for a long time, if we take 2021 out of the picture, which is the result of a peculiar conjuncture as just described, since the advertising investment has shifted mainly to the online world. In any case, TV AVOD (TV content financed by advertising) still fails to balance the losses in broadcasting, which still remains by far the prevailing source of advertising revenues.

Pay-TV in turn stop growing, halting a rise which seemed relentless, and in 2022 recorded a paltry +0.5% in absolute values, as the increase given by SVOD (Netflix & Co.) was mitigated by the retreat of traditional linear services. Thus, the VOD component, whose growth in the last year was around 8%, compared to an annual average of 27% in the last five years, has risen in just five years from 14% to 30% of the total, even becoming the majority source of revenues in some countries. At the same time, however, SVOD operators themselves, such as Netflix, are beginning to show signs of stagnation, and their offer now are increasingly shifting in part towards the use of advertising resources to cope also with the economic crisis.

In this changing environment, FAST channels are set to become the next big thing. Despite the misgivings of many, there is a growing consensus that this phenomenon is set to expand, although currently only the US represents an interesting market with great prospects. At the same time, an important role, although moving in a critical field, between risks and opportunities, is the one that generative AI could also play in the content sector. Analysing use cases, generative AI can have a huge impact in the following areas: content creation, production and management; personalising the audience experience; improving monetisation by optimising business models and consumer behaviour.

The annual report, 'Turning Digital - Outside the Comfort Zone', is a unique study to understand the major transformations of Television in Europe and the main industry trends.

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