Revenue and platform diversification in Europe: linear TV will still account for 57% video revenues in 2025

In 2023, commercial video revenues across TV and OTT in Europe topped EUR 92 billion, and this figure is expected to reach 98 billion in the next 2 years. Video distribution revenues are expected to grow by 4% and 3% this year and the next across the region. Another 22.5 billion are brought into the industry each year through subsidies to public TV broadcasters. OTT to represent 43% of commercial video and TV revenues in Europe by 2025 If linear TV still dominates the landscape both in terms of audiences and revenues, traditional broadcast has seen its market share decline steadily in the last few years, to the point where streaming services accounted for 37% of subscription and advertising revenues last year. This share is expected to reach 43% by 2025. Despite a relatively slow decline already initiated since 2022, commercial linear TV is expected to account for more than EUR 55 billion yearly across free-to-air advertising and pay TV revenues in the next 5 years. If digital video services are driving the overall growth in revenues for TV and video companies in Europe, stabilization is also expected on this segment. 2023 marked the first year for which subscription OTT revenues dropped under the 10% year-on-year growth rate. This translated into a much tougher competition for subscriber acquisition, and a widening gap between leading platforms that have ratified their “household name” status, versus new entrants pushed into superbundling strategies with well-established local distributors to rapidly expand their reach.  As OTT services enter an era in which subscription revenues’ perspectives are contracting, platforms’ focus is increasingly shifting towards subscriber retention and improving ARPUs, in order to stabilize revenues. On the other hand, advertising has become a key aspect of digital video services, that aims at expanding their footprint toward a larger potential audience, and diversifying revenue streams by monetizing premium inventories on the big screen to qualified audiences. OTT advertising revenues are expected to keep flourishing at a double digit growth rate for the next 2 years, to represent over EUR 17 billion by 2025. A clear West-North vs East-South dichotomy structures the digital transition in the European video landscape The industry is well advanced in its transition towards digital video platforms, but some markets are well ahead: OTT accounted for 50% of overall TV and video commercial revenues in the UK, and 45% in the Nordics last year. These countries have been testbeds for global OTT players to launch their services in Europe for over a decade now. They are generally characterized by higher ARPUs and a well developed access to premium content, generally through a high penetration of pay TV services.  Markets like Spain, Italy or Greece still have...