The economics of broadcasters’ collaboration in Europe

Is collaboration the only way for European broadcasters to succeed in the OTT era? Analysts (including the one writing) have been writing chronicles about the decline of linear broadcast globally for several years, highlighting how global digital players have been gulping a growing part of domestic actors’ market shares, and how this threatens the long-term prospects of national media actors. In Europe, the context is generally perceived as a bleak one for domestic broadcasters: regional media powerhouses have seen their valuation dropping in recent years, following concerns from financial markets that the golden age of TV is coming to an end, while content owners are struggling to open new perspectives forward.    Among potential perspectives that are often reemerging in the European TV ecosystem is collaboration. This is a key aspect of how the broadcasters’ ecosystem has been evolving in Europe, with multiple areas of cooperation already well-established: co-producing content, building common technical standards, agreeing on industry metrics around audience measurements and ad standards… This is far from a new topic, but the current threats that individual broadcasters face from digital competitors are enticing them to step up collaboration opportunities. In RTL’s last yearly report, it is even stated as one of their top priorities: “Fostering alliances and partnerships in the European media industry”. For now, TV broadcasters have proven quite resilient in Europe, especially when compared to the US where cord-cutting has put an end to the golden age of cable and broadcast TV, or Asia where entertainment and media consumption has dramatically shifted to mobile, especially as some key markets in the region have much younger demographics. But the trend is nonetheless visible on the Old Continent too: media is moving to IP, and the big winners of that race are not waiting for the broadcast world to catch up. Having a strong presence in the digital space is especially important to reach younger generations, for whom audience metrics show an ever-widening gap between media consumption on linear TV and on digital platforms. European broadcasters have largely answered positively to the challenge, and pushed ambitious initiatives to retain their prominence, this time in the digital media space.  Regulatory frameworks are also set to get modernized in order to address changing viewer behaviors and enable broadcasters to put streaming at the forefront of their distribution strategy. The new Media Act 2024 established in the UK by OFCOM is the first of its kind in the region, and enables public service broadcasters which operate free-to-air channels to compete on par with other OTT services in a connected TV world, notably granting them more flexibility to fulfill their media obligations through either linear or streaming content and by giving them prominence on...