EU and the lost market

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Today, European ministers asked to save the European audiovisual industry

COVID-19 and streaming video platforms are destroying the market of European audiovisual producers. With losses, in 2020 alone, of at least € 200 billion. Now the EU is trying to recreate a market that has perhaps already been lost, bringing to mind the defeats of previous decades in the sectors of PCs, VCRs, HD screens, digital cameras, audio players, smartphones and tablets. Is the goodwill expressed by the EU ministers of culture sincere? Will they have the necessary weight in their countries to realise the dreams of revenge?

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COVID-19 and streaming video platforms besiege the Europe of Culture

COVID-19 has brought the European cultural industry and, in particular, the audiovisual industry to its knees. During the crisis, advertising revenue fell by more than 20% and European cinemas suffered huge losses.

Who profited from it? Or, better: is the crisis only due to COVID-19?

In reality, COVID-19 has dealt the final blow to a European audiovisual industry already under siege.

In fact, in the post “cable universe” era, it seems there is no place for European streaming platforms. Indeed, they simply do not exist. Dominating the world market are Netflix, Hulu and Amazon Prime Video. Apple TV + and Disney + have been added since the end of December 2019. Even more recently HBO Max and Paramount + have arrived.

The European “Creative Europe” program supported the creation of the UNCUT platform available in Belgium and Luxembourg (2 600 European and independent titles). Then there is an Albanian platform, two niche British and a recent German one, JOYN + which combines TV and cinema.

Few experiences and no apparent growth potential.


An ancient and sad story of defeat

We are paying for a fragmented European market, with the 27 countries in constant competition with each other and with little desire to build critical mass. Indeed, with the tendency to engulf the neighbors’ market.

Europe is a long and bitter old story. It starts from a long way off. Forty years ago VCRs were born. Europe had three different TV standards. Countries have never agreed, thinking of eating the neighbor and so they gave the European market to Japan. They tried in the late 1980s to launch high definition TV, owning all the technologies before the others. Even then, the competition between European manufacturers has ruined a dream and now there is no European HD screen worth mentioning. The same happened for all audiovisual products. The market was handed over to the US or Eastern countries. So the hardware is lost.


The role of streaming platforms

The streaming platforms like Netflix, Disney+, Paramount+, Hulu etc. are now swallowing up the creative part of European audiovisual production as well.

During the periods of confinement, online platforms strengthened their market position, launched new services and attracted new audiences. New online social media platforms, based largely on audiovisual content, also recorded download records, particularly among young users.

Several major international video-on-demand platforms have appeared on the European market and are successfully producing content in Europe. These platforms have proved both an opportunity and a challenge for European independent audiovisual works and producers.

On the one hand, platforms can guarantee European producers and artists access to a wider international audience, as well as attractive remuneration. These are, in some cases, complemented by incentives based on the exploitation of the film / series and / or bonuses linked to the success of their works.

On the other hand, the application by platforms of what could be called a “work-for-hire” model (ie the acquisition of all intellectual property rights of the manufacturer and / or individual creators since beginning, globally and in perpetuity) can “bind” producers / talents to the platform in question.


The audiovisual market that matters today is only the world market

Today, 700 million people have a subscription to a video streaming platform. So one in ten human beings. In the last year alone, growth was 220 million, or 28.3%. The main platforms are today 21, with NETFLIX the undisputed leader with 200 million subscribers, doubled compared to three years ago and with a market capitalization of at least 220 billion dollars. China will soon become the largest market in the world for subscription video on demand (SVOD), with at least 500 million active subscriptions within 5 years.


The EU raises its head. With what strength?

Last December, the European Commission presented a € 400 million support plan. These add up to almost 2.4 billion euros just agreed between the Council and the European Parliament for the Creative Europe 2021-2027 Program, of which 60% is destined for audiovisual production.

In reality, the sector invoices 193 billion euros annually and considering the heavy losses suffered, European support will be a drop in the bucket.

But as is always the case with European financial facilities, they should attract and catalyse additional investments, which could be enormously superior.

Furthermore, the mechanism for recovery and resilience represents an important opportunity for Member States to invest in the dual digital and green transition and strengthen the resilience of the industry. Each national recovery and resilience plan will allocate a minimum level of 20% of spending to digital. Measures to promote the production and distribution of digital content, such as digital media, will be considered for this purpose.

Ultimately, adding up all the financial resources that will be made available to the EU, without counting those that will be added by the private sector and national support, we will reach a figure close to 140 billion euros for the digital and audiovisual sector included.

EU Culture Ministers also called today for efforts to ensure that the audiovisual industry can reach European and international markets and audiences more easily. To increase the circulation of European content in Europe and internationally, cooperation on production and distribution needs to be facilitated. Support for cross-border collaboration between audiovisual market players is also crucial.

The action plan agreed today by Culture Ministers proposes a number of initiatives to support the audiovisual and media sectors. A planned MEDIA INVEST initiative will provide € 400 million to support investment in the audiovisual industry. The media will benefit from NEWS loans and investments. An interactive digital tool will help media companies identify the most suitable financial support scheme.

These initiatives, still in the form of a proposal, will have to follow the long European approval process and will see the light in a year. Unless they want to go faster to save what can be saved.


Go to the Dashboard of Culture committee of the European Parliament 

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