Across Western Europe, advertising revenue continues a gradual shift toward digital avenues, at the expense of TV advertising outlays. IHS Markit estimates that in the five biggest markets – UK, France, Germany, Italy and Spain – traditional TV advertising revenue grew just 9 per cent between 2014 and 2018, reaching $20.8 billion (€18.2bn). In contrast, online video advertising revenue grew 187 per cent in the same period to reach $3.8 billion. Broadcasters only captured 25 per cent of this market in 2018, as Google and Facebook’s influence increased. To mount a stand against these two online behemoths, broadcasters have revised their strategies, and alliances have become more commonplace.
Following in the footsteps of AT&T’s launch of Xandr in the US, RTL AdConnect, Sky AdSmart and other European alliances offer some hope broadcasters might regain market share from the Google-Facebook duopoly, by pooling content, distribution rights and their addressable ad inventory, while leveraging the enduring power of TV for brand building.
Taking content and ad-sales inspiration from the US, many of the European broadcaster VoD partnerships are reminiscent of Hulu’s hybrid model. For instance, French public broadcaster France Télévisions is teaming up with commercial broadcasters TF1 and M6 to create Salto, which will offer live and catch-up content, as well as exclusive content through various subscription offers. The trio assert that Salto will fit alongside their existing free online video platforms, while they also remain open to more broadcasters joining the platform in the future. In Spain, public broadcaster RTVE has similarly teamed up with commercial broadcasters, Mediaset España and Atresmedia, to launch a free-to-air service LOVEStv. The platform will eventually be developed into an OTT service, which is also open to other digital terrestrial broadcasters in the country.