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European broadcasters are reinventing themselves for the future of TV

A modern TV screen shows the blue of the EU flag with 12 gold stars/ The stars blink in and out in the form of a screen loading circle.

Illustration by Robyn Phelps / Getty / The Current

The British advertising world’s most controversial news yet this year came from an unexpected player: the BBC.

The Times reported last month that the BBC was planning to serve ads later this year on some of its podcasts in the U.K. The public broadcaster said that “adverts are the norm” on third-party platforms, but industry uproar was swift. Commercial broadcasters objected to what they called the “market distortion” of using the license fee to generate content that’s funded by ads.

While this shift may only be affecting the podcast arm of Britain’s largest ad-free TV broadcaster, it isn’t happening in isolation. A TV revolution is taking place across Europe.

Many public and commercial broadcasters are racing to reinvent their content, ad offerings and revenue models to better compete with American streaming giants.

Succeeding has become more urgent as streamers move into European broadcasters’ area of strength: ad-supported content, including live sports.

“The streaming era has put Netflix, YouTube, Disney+ and Prime Video as the leading forces in almost every European market,” says Ophélie Boucaud, principal analyst of European media and advertising at Dataxis.

Why this matters

European broadcasters’ reinvention is expected to shape the shows, ads and culture that Europeans will see for years to come.

“What is at stake is European broadcasters’ very position in the media industry and, more than that, their ability to keep reaching local audiences with local narratives in a new, unfamiliar space that a lot of them entered rather late,” says Boucaud.

Broadcasters may have little choice but to transform.

Ampere Analysis data shared by Neil Anderson, a senior analyst at the firm, shows that linear TV advertising revenue dropped by 900 million euros ($957 million) over the past decade in Europe’s Big 5 markets (U.K., Germany, France, Spain and Italy).

Meanwhile, ad views on European connected TV (CTV) grew 24% year on year in the second half of 2023.

The big picture

It’s not just about the money.

Western Europe has a long tradition of public broadcasters serving the public interest. Commercial ones, meanwhile, add diversity to content offerings and national culture.

“As global streamers prioritize profit over public responsibility, there is a risk of homogenizing storytelling and overlooking the cultural significance of locally produced content,” says Ampere Analysis’ Anderson, “potentially diluting the public-interest content that European markets have long sought to preserve.”

The backstory

All major U.S. streamers have now launched ad-supported plans in Europe. Free-ad supported television (FAST) players have barged in, too, like Samsung TV, LG Channels and, as of this month, Sony. That’s added more competition for CTV ad budgets in Europe.

European broadcasters have launched their own ad-supported streaming services as well, like Britain’s ITVX and Germany’s Joyn.

They’ve also looked for scale. France’s TF1, M6 and France Télévisions launched streaming service Salto, though it shut down last year. In Spain, Lovestv brings local broadcasters into one smart TV interface but with ad inventories still separate, says Boucaud.

Hopes are high for Freely, a free ad-supported streaming service pushed by Britain’s BBC, ITV, Channel 4 and Channel 5, due to launch in the second quarter of this year.

“European broadcasters are putting streaming on the forefront of their strategy to make up for declining linear TV ad sales,” says Michail Chandakas, TMT analyst at S&P Global Market Intelligence.

Many have moved onto streaming giants’ home turf, subscription content, and launched premium subscription video on demand (SVOD) services in addition to their ad-supported offerings, like RTL+, TF1+ and TV 2 Play.

They’ve also introduced FAST channels to monetize older content. It’s a sizable opportunity: S&P Global Market Intelligence’s research group Kagan forecasts revenues from FAST platforms in Europe to exceed $1 billion by 2027, more than double the figure in 2023.

The opportunity

Advertisers are likely to be the ultimate beneficiaries of European broadcasters’ reinvention.

Broadcasters’ competitiveness seems to lie in ad-supported content offerings, rather than going toe-to-toe on premium subscriptions with the streaming giants and their equally giant content budgets.

“U.K. broadcasters have sought new opportunities for advertisers, focusing on the value of digital addressable TV advertising solutions,” says Ampere Analysis’ Anderson, pointing to ITV’s Planet V and Sky’s AdSmart as “helping to facilitate the proliferation of addressable advertising across Europe.”

Mainland Europe’s broadcasters have been just as busy. Germany’s RTL and ProSiebenSat.1 combined their ad tech stacks in February to make programmatic linear TV and CTV ad buying easier for advertisers.

“This technological foundation will appeal to new, particularly digitally savvy customers,” claims Stephen Byrne, VP of partnership development at RTL AdAlliance.

France’s TF1 and M6 announced in March they will be supporting European Unified ID and other alternative identifiers. This will enable advertisers to find consumers in cookie-free CTV environments.

Making things easier for advertisers will likely be crucial for broadcasters that want to reclaim their piece of the ad-spend pie.

“The lack of automation in buying processes has hurdled the growth of those services,” says Dataxis’ Boucaud. “With ad sales being still encased within each national publisher’s scope, and direct sales remaining the main access to ad inventories, it has been harder to onboard smaller accounts on inventories dedicated to the big screen.”

Broadcasters should follow the example set by RTL and ProSiebenSat.1 in combining ad tech stacks “to take advantage of economies of scale and become less dependent on U.S. tech giants such as Meta and Alphabet,” says S&P Global’s Chandakas.

Here’s what else

Courting advertisers is only part of the story.

Investment in original local content can often help differentiate European broadcasters from their American rivals. Examples include The Emperor’s Stone, a show co-produced by France Télévisions, ZDF and RAI, Sky Germany’s Babylon Berlin and RAI’s Medici.

Commercial partnerships can also bring new revenue sources in the face of declining linear TV ad sales.

In May this year, British hit show Doctor Who will premiere for the first time on Disney+, after the BBC licensed the show’s global rights to Disney while retaining U.K. rights.

Tim Davie, the BBC’s director general, said in a speech that the broadcaster “will utilize commercial partners much more actively in areas like programming and technology to increase our horsepower.”

European broadcasters’ range of content, like local-language programming, large-format shows and live sports, “serves as a counterbalance to the premium dramas and movies offered by SVOD platforms,” says RTL AdAlliance’s Byrne.

“Classic TV and digital content will exist alongside each other, as they serve different purposes for viewers,” adds Byrne.

What’s next

Investment in original local content, ad tech innovations and smart commercial partnerships could put European broadcasters in good stead for the future of TV.

The trick will be to keep it going.

“Strengthening their streaming platforms is crucial, which involves the expansion of content libraries, enhancement of digital advertising capabilities and experimentation with digital-first content releases,” says Ampere Analysis’ Anderson.

Looking beyond Europe’s shores could also pay dividends, though Nordic streamer Viaplay’s retreat from global markets last year is a cautionary tale.

“For European broadcasters to keep pace with the viewing revolution, they will need to embrace global audiences while still super-serving local populations,” says Sophia Vahdati, marketing and insights director at Digital i.

“Some excellent shows and films get made in our corner of the world, but to truly thrive, this magic has to reach across continents.”

The Current is owned and operated by The Trade Desk Inc.