Turning Digital

A changing TV world

In 2007, European television market grew by 4.7% as a whole, against +6.2% in 2006, thus accounting for neaqrly €89 billion.
Advertising reached €37.5 billion, +3.2 over 2006, more or less in line with the inflation rate. Most of the increase is attributable to new digital channels and IPTV offers, while traditional broadcasters records only modest growth performances. So innovative services, while still marginal are the liveliest segment of the whole advertising market, the Internet is becoming a more and more popular media, somewhere reaching the radio as the third advertising channels, afeter TV and press.

Pay-tv drives the market, reporting a growth of 9%, after three years of two digit growth rates and reaching €32.2 billion. On demand content is getting more and more popular, as well as a key feature for pay-tv providers, in order to attract more viewers.

Penetration of digital TV is moving ahead: at the end of 2007 there were nearly 90 million digital TV households in Western Europe, thus reaching 54% of European TV households. After the Netherlands, also Finland and Sweden completed the analogue switch off in 2007.

New platforms such as ADSL, FTTH are still struggling to get a place in the market. In spite of still being a marginal platform, the IPTV is reporting interesting figures: at the end of 2007 there were 5.2 million households subscribing to an IPTV service, half of them were located in France.

Alfer the first commercial launch of mobile broadcasting TV in Italy, in June 2006, other services followed in Germany, Finland and the United Kingdom. Other services are expected to launch with the EC mobile TV, most of them in Italy. In the UK the BT Movie service offered by Virgin Media had to close down because of poor results.

Main trends

Even though competition among platforms has not yet clearly indicated a winner, the multichannel diffusion has become significant everywhere.

Technological developments have allowed new models for content consumption. User generated content, on demand services, catch up TV, PVRs which allow the creation of individual schedules and skipping commercials are breaking up the traditional passive mode of content consumption.

Facing these phenomena, some TV players are actually proactive in creating cross-platform synergies, in order to exploit their expertise and brand across a multitude of platforms, thus increasing their profits.

This framework leads both to growing specialization and to the rise of global players, in fields such as content production that once used to be limited to national markets. On the other hand, the number of potential broadcasters increases and separation between roles gets less clear-cut: every operator can play dofferent roles at one time. The competitive scenario is changing substantially compared to the one we had been used to for the last twenty years.

More details in the Annual Report - Turning Digital