As Streaming Giants Cut Back on Spending Growth, Europe’s Broadcasters May Capitalize

Europe’s commercial broadcasters “must resist content cuts and embrace streaming to reclaim lost ground,” especially as streaming giants are moderating their content spending growth, according to research firm Ampere Analysis.

A new forecast, unveiled Monday, predicts that after reaching the same spending level as commercial broadcasters for the first time in 2023, spending by subscription video-on-demand platforms will hit 10 billion euro ($10.9 billion) in Europe’s five major TV markets, namely the U.K., Germany, Spain, France and Italy, in 2024. “This surpasses the investment made by the region’s commercial broadcasters in original and acquired content [that] face major challenges of strong competition from deep-pocketed streamers, increased pressure on their own content budgets, and falling viewer engagement levels,” it said.

But the broadcasters have an opportunity at a time when spending growth by increasingly cost-conscious streamers moderates.

According to Ampere’s Media Consumer Behavior Tracker, which conducts biannual interviews with 2,000 consumers, commercial broadcasters have seen an average 16 percent decline in consumer engagement across Europe’s big five markets since 2016. Their content spending budgets have fallen by 19 percent since then, “even as they continue substantial investments in film and TV content,” the firm said. It also highlighted a decline of nearly 1 billion euro ($1.3 billion) in the linear TV advertising market over the past decade.

“Despite these obstacles, commercial broadcasters have demonstrated adaptability by intensifying their focus on streaming strategies,” according to Ampere. “The next few years present a strategic opportunity for broadcasters amidst a slowdown in spending by the major streaming services. Investment by global streamers in European-sourced content is forecast to grow by 8 percent year-on-year in 2025, compared to an average annual growth rate of 35 percent between 2021 and 2024.”

Explained the research company: “Industry giants, including Netflix, Disney, and Warner Bros. Discovery, are scaling back streaming spend growth to ensure sustained profitability, paving the way for national broadcasters to capitalize on this shift.”

As such, maintaining or increasing content investment levels is “crucial” for broadcasters to “differentiate themselves in an industry where major global streamers are adopting more conservative spending strategies,” Ampere concluded. “Bold commissioning decisions can set broadcasters apart, drive engagement and advertising revenue.”

Ampere estimates content spend by European commercial broadcasters to remain fairly steady at $8.7 billion this year after $8.5 billion in 2023 and $8.7 billion in 2022, with a slight gain to $8.8 billion forecast for 2025. Public broadcasters are seen following a similar trend to hit $8.4 billion this year and $8.5 billion next year after $8.4 billion in 2023. Pay TV companies will also see little change, the research firm projects, moving from $6 billion in both 2023 and 2024 to $5.9 billion in 2025.

Meanwhile, streamers’ content spend jumped from $7.2 billion in 2022 to $8.5 billion in 2023 and is estimated to reach $10.6 billion this year. In 2025, Ampere forecasts a slighter gain to $11.4 billion.

Beyond content spending decisions, European broadcasters must also “prioritize the transition of audiences to streaming to ensure their long-term relevance,” it argued. This involves the likes of investing in their streaming platforms, expanding content libraries, enhancing digital advertising capabilities, experimenting with content release strategies across linear and streaming platforms, as well as “tailoring content output to cater to younger demographics.”

Said Neil Anderson, senior analyst at Ampere Analysis: “Despite the short-term benefits of cutting costs during economic downturn, prioritizing long-term investment in both content and streaming capabilities is crucial for commercial broadcasters to maintain prominence in Europe’s cut-throat TV market.”