SVOD surges but cord-cutting fails to ignite across Europe | Media Analysis | Business
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Unlike as is the case in the US, a strongly growing SVOD market has not affected negatively the whole audiovisual market in Europe while cord-cutting is regionally patchy according to a study for the European Audiovisual Observatory (EAO).

Pay AV services distribution 14June2019Indeed the study found that linear pay-TV has still been thriving in some subscription video-on-demand stronghold countries while cord-cutting is still very dependent on the different parameters of national markets and not a pan-European phenomenon. The study calculated that pay audiovisual services accounted for three-fifths of the whole market in 2017 with pay-TV representing 90% and SVOD the remaining 10%. Moreover, pay AV services were growing faster than the rest of the AV services market.

While the SVOD uptick did not cause a significant slowdown of the pay AV services market, the research did show that it captured most of the revenue growth. Even though pay AV services subscriptions increases were driven by SVOD, the latter had a much lower ARPU than pay-TV.

One of the major findings of this new report is that cord-cutting is not taking place right across the board in Europe and is very specific to national markets. Each national market has been and is still shaped by very specific conditions, often exogenous to the pay audiovisual services, including purchasing power, supply of free services, penetration and performance of broadband access and, obviously regulation.

Yet perhaps one of the most important aspects revealed by the EAO was that both pay-TV and SVOD uptake vary markedly from one country to another as well as from one player to another. This is also why even though cord-cutting is a reality in Europe, it is not ubiquitous since it depends on the national market conditions of a highly diverse European pay AV services landscape. That said, the survey found that over-the-top (OTT) services were driving the adoption of pay AV, while cable remained the first network of choice for pay-TV distribution. Between 2008 and 2017, four-fifths of the pay AV services’ net additions were delivered by OTT (50%) and IPTV (30%).

Pay-TV adoption growth was found to be driven by IPTV (61%) and Satellite (39%) over the same ten-year period. However, the pay-TV base was still dominated by cable in 2017 but with a market share almost 20% lower than in 2008 as the erosion of cable subscribers took hold between 2013 and 2017.

In terms of key players, the Pay AV Services In Europe: The State Of Play report found that Netflix, Comcast and Liberty Global controlled a third of all EU subscriptions to pay AV services in 2017. Almost a third of pay-TV subscriptions were signed off either to Liberty Global — UPC, Ziggo, Virgin TV, Telenet, Unitymedia TV — or Comcast (Sky), while Netflix and Amazon alone accounted for almost four-fifths of the SVOD subscriptions in the EU.