Mergers, acquisitions and alliances: what is holding back European TV projects?

As traditional TV networks revenues continue their decline in favour of digital, global groups from the US reach records in attention captured across OTT platforms in Europe: Netflix, Amazon, Disney, Warner Bros. Discovery and Comcast together gathered 73% of European SVOD subscriptions and Alphabet and Meta alone concentrated around half of Europe’s total AVOD monthly users in 2021. Although still relatively small compared to US giants on the European scale, European players have initiated their transition to digital and are trying to gain momentum in the digital space, whether they are broadcasters or telecommunication operators. The largest can count on their established position in their home market, and in some cases benefit from substantial revenues from traditional activities. RTL (including M6) generated almost €3.5 billion of net advertising revenue in 2021 through its TV networks and Canal+ generated €2.1 billion through Pay TV distribution only for instance. European players launched several initiatives in recent years to strengthen their position and take the digital turn. These initiatives took several forms, first of all formalised co-production agreements between broadcasters to reduce the gap with American players in the production budgets allocated to their projects. For instance, the Alliance between public broadcasters France Télévision, ZDF and Rai announced in 2018, or the pooling of resources between Arte France and Arte Germany. The partnerships were designed to compete with the premium content offered by major SVOD platforms, and to capture audiences’ interest with high-budget content. Joint ventures resulting in the launch of new digital platforms also appeared: LovesTV between RTVE, Mediaset Espana and Atresmedia, Salto between France Télévision, M6 and TF1, or Britbox between the BBC and ITV among others. Although aimed at domestic markets, these initiatives did not reach expectations - Salto and Britbox have both only attracted less than 2% of SVOD subscribers in their respective markets at Q2 2022. The different advertising agencies did not agree on a common advertising sales strategy for LovesTV - preventing economies of scale. The strategic interests between public and commercial broadcasters were unable to align for Salto - weakened only six months after its launch by the announcement of the attempted TF1-M6 merger and recently jeopardised by the launch of paid BVOD platforms by both TF1 and M6. Although results are limited in the domestic market, Britbox shows some success internationally: 2.7 million international subscribers at Q2 2022, including 200,000 in the Nordics, only two months after its launch. ITV recently bought out BBC's share of the domestic platform and will integrate it into its own digital platform ITV Hub+ in the UK, which will be renamed IVTX. Until now, alliances between national television networks struggled to attract customers on their paying digital platforms. It...