EAO: More Than 33% of All SVOD Services Operating in Europe Are American

Of the more than 3,100 subscription streaming and over-the-top video platforms operating in Europe in 2022, more than 33% are U.S. based services, led by Netflix, according to new data from the European Audiovisual Observatory, part of the Council of Europe based in Strasbourg, France. Another 20% of all commercial pay-TV operators in Europe are American based.

In addition to the European Union countries, the data covered Albania, Armenia, Bosnia and Herzegovina, Georgia, Iceland, Liechtenstein, Montenegro, North Macedonia, the Republic of Moldova, Norway, Serbia, Switzerland, Turkey, the United Kingdom and Ukraine.

Among pay-TV distributors operating in Europe, the Walt Disney Company, has a virtual market dominance operating in 45 European TV markets.

Among SVOD services, Netflix uses a centralized strategy with a single country of establishment from where it is targeting the European markets, according to the EAO. A core hubs strategy is used by the BBC, where typically a small number of countries serve as a basis to target various national markets. AT&T, by contrast, applies a decentralized strategy where a larger number of establishment hubs serve the European markets.

Nine countries account for 96% of on-demand video services mainly serving non-domestic markets. Ireland, the U.K. and the Netherlands are the hubs for the most significant U.S. global streaming players’ base of operations.

Among U.S. media companies operating in Europe, Warner Bros. Discovery and its majority parent, AT&T, rank No. 1 in market share across pay-TV, VOD and streaming. Other U.S. firms in the top 10 include Google, Disney, Apple, Comcast, Prime Video, AMC Networks and Paramount Network.

Netflix doesn’t make the list since it is singularly focused on streaming only.

EAO: Netflix, Sky Dominate European SVOD, Pay-TV Markets

Subscription streaming video pioneer Netflix, and satellite-based pay-TV operator Sky continue to dominate the European market, according to new data from the European Audiovisual Observatory, part of the Council of Europe in Strasbourg, France.

The report, which aims to shed light on the structure of the streaming video and pay-TV industry in Europe in terms of revenue as well as other performance indicators specific to key market segments, found that Sky (through 2020) generated more revenue ($18.5 billion) than both Netflix Europe ($7 billion) and German public broadcaster ARD ($7.4 billion) combined.

Indeed, the report found that public broadcasters still account for one-third of global viewing consumption in Europe. At the same time, Netflix held a 35% market share among SVOD markets, followed by Amazon Prime Video at 20.4%. SVOD remained the most concentrated audiovisual market in Europe in terms of subscriptions, according to the report.

While the EAO found that the top 100 audiovisual companies showed a resilience to COVID-19, merger and acquisition activity has been accelerated by the streaming rush and the pandemic crisis. U.S. interests in the Europe show an upward trend, driven in part by HBO Max, Paramount+, Discovery+ and Disney+ expansion throughout the region, including Eastern Europe.

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The cumulated operating AV services revenue of the top 100 companies in Europe (+7.7% over 2016 at the end of 2020) grew slightly more than average inflation and the overall market. The growth was driven solely by the private sector (+12% over the same period), with more than 75% of the incremental revenue cumulatively delivered by pure SVOD players alone (Netflix, Amazon and DAZN, etc.).

By contrast, the revenue of the traditional AV players has stagnated, with businesses relying on advertising being more severely affected and publish broadcast market share down by 3% over the five-year period.

Concentration remains similar over the analyzed period, with the top 20 players accounting for around 70% of the top 100 European AV groups by operating revenue. Although this percentage is much higher in the private sector (85%), it still shows less concentration when compared to the U.S. market.

U.S. streaming companies’ internationalization efforts for the five-year period (+4% up to 31% of the top 100 revenues in 2020) with a preference for prioritizing direct as opposed to traditional indirect investments. While the share of U.S. interests was by far the highest in the SVOD market (78%) at the end of 2020, their contribution as (executive) producers of European TV fiction titles remained limited (6% of the total number of TV fiction titles produced in Europe between 2015-2019).

The M&A activity did not really impact the share of the U.S.-backed players or significantly contribute to the overall growth, but it did help bolster the top companies’ revenue in Europe. Company mergers were driven by strategies to obtain more premium content at competitive prices, seeking to pair that content with stronger distribution, aiming to build stronger mobile distribution, eyeing territorial expansion or refocusing on strongholds to strengthen existing market positions.

Although active in several AV market segments at the same time, most of the top companies operating in Europe tend to also hold a strong position in at least one additional activity. Specifically, for broadcasters and pay-TV operators, diversifying into TV production seems a common strategy and answer to the threat of on-demand over-the-top video services.

With the top four OTT platforms controlling over 70% of subscriptions, SVOD stands out as the most concentrated audiovisual market segment in Europe, followed by pay-TV with 72% of subscriptions cumulated by the top 20 pay-TV operators.

Even if under-represented in terms of volume, public broadcasters accounted for one-third of global viewing consumption in Europe and almost all of them were offering at least one on-demand service at the end of 2020.

Netflix reports fourth quarter (ended Dec. 31, 2021) financial results Jan. 2o.

Report: U.S. Movies Top Global VOD Distribution

New data from the European Audiovisual Observatory finds that 90% of U.S. theatrical movie releases since 1996 have migrated to video-on-demand distribution in at least one foreign country. Runner-up, the U.K., has 79% of its theatrical releases in worldwide VOD release.

At the same time, 56% of European films released in theaters between 1996 and 2020 were available on VOD in May. Compared to U.S. films, that’s a smaller share. But as there are many more European films than American movies in release theatrically, in absolute values, the number of European films migrating from the theater to VOD is 2.6 times higher than the number of U.S. films.

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The report underscores the value VOD has in expanding the consumer reach to all movies — especially lower-budget indie titles — compared with traditional theatrical exhibition. In regard to European movies, VOD brings the most additional distribution to films with 50,000 tickets sold or less.

“[The data supports the] cooperation rather than competition [between] cinema and VOD, while VOD opens up new markets to less successful films,” Gilles Fontaine, head of the Observatory’s department for market information, said in a statement.

Notably, the report found that a movie’s availability on VOD was driven by transactional VOD (59%) more than by subscription VOD (41%). SVOD’s share of VOD presence is higher for films with higher box office revenue. On a country basis, exclusivity between TVOD and SVOD seems to be the rule, with exceptions: Movies with higher admissions or originating from the U.S. were more often available both on TVOD and SVOD.

 

Amazon Tops Netflix as Top SVOD Buyer of European Movies

New data from the European Audiovisual Observatory finds that Amazon Prime Video is the largest streaming video buyer of European movies.

Established by the Council of Europe in 1992, the EAO found that 16 North American, three Chinese and one Russian streaming services have the largest catalogs of European-produced movies.

Amazon topped Netflix with 3,281 unique European-produced titles, followed by Netflix with 1,816 unique titles. Russian streaming service Ivi and the Chinese services Youku, iQiyi, Tencent Video were the biggest single country services acquiring European films.

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Indian service Eros Now, Canadian service Sundance Now, Viu and CBS All Access carry from three to 31 unique EU film titles in their catalogs.

 

The report focused on a sample of 79 non-European SVOD services and their catalogs in 21 countries across the globe.

The majority of EU films found on SVOD services around the world are produced in five countries.

The United Kingdom is the biggest supplier of EU films with 38% of all unique EU titles, followed by France with 18%, Germany with 12%, Italy with 11% and Spain with 6%.

Together, these countries account for 85% of all unique EU film titles available on SVOD outside of Europe.

The report also found that medium-size, film-producing countries contribute significantly to SVOD services.

Belgium, the Netherlands, Austria, Sweden, Denmark, Finland and Ireland export films outside of Europe. These seven countries account for 11% of all unique film titles found in the SVOD catalogs.

“With 7,450 unique film titles, EU film titles represent 14% of film titles on offer in the 79 SVOD catalogs studied,” Christian Grece, on-demand audiovisual markets analyst, wrote in the report.