Movies

Economic conditions of European TV companies improve but the branch as a whole remains in deficit

http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/smartcrop_800x800/public/images/movie-images/2016/02/02/Itv.jpg?itok=zDFMuUvk

he European Audiovisual Observatory has just published the first volume of the 2005 edition of its Yearbook - Cinema, television, video and multimedia in Europe. This volume presents a detailed economic analysis of television companies throughout Europe.

After the 2001-2002 period, when huge losses were recorded, the overall situation of television companies in the 25 European Union member states improved in 2003 and 2004. TV company revenue rose by EUR 10 billion between 1999 and 2003, reaching EUR 64.5 billion in 2003, an average annual increase of 4.4 per cent.

The sector as a whole achieved a small but positive profit margin in 2003 (0.4 per cent compared to -5.7 per cent in 2001 and -3.7 per cent in 2002), although the net deficit remains considerable: EUR 2.4 billion compared to EUR 4.7 billion in 2001 and EUR 3.1 billion in 2002.

The European Audiovisual Observatory analysed the annual accounts and balance sheets of around 550 television companies for the years 1999-2003. There are not yet enough figures available for 2004 to carry out a similar analysis for that year, although all the indications are that the financial recovery of this sector continued.

Growth rates vary from country to country

The United Kingdom is by far the country with the largest TV company revenue: EUR 17.3 billion in 2003, compared to EUR 13.6 billion in Germany, EUR 10.5 billion in France and EUR 7.6 billion in Italy. This is due to the high level of funding of public service television, the advanced development of digital television and the number of channels available, but also to the fact that many pan-European broadcasting companies are based in Great Britain.

The yearly average growth of 4.4 per cent is fairly disappointing compared to the two-figure growth rates enjoyed by the sector in the 1980s and 1990s (it was still 10 per cent in 2000). The poorest growth figure was recorded in 2002 (0.4 per cent), although it rose to 3.2 per cent in 2003. Of the larger countries, only France achieved average growth higher than the European average (5.7 per cent), although the growth stimulated at the start of the decade by the increasing importance of thematic packages and channels is, in France as elsewhere, beginning to tail off. Germany suffered a 1.6 per cent drop in 2003, mainly due to a recession in the advertising market. The apparent slump in the British and Polish markets is actually due to the conversion of figures into euros. The revenue of British companies rose from GBP 10.8 billion in 2001 to GBP 12.2 billion in 2003. In the national currency, the Polish market remained quite stable at around PLN 4.1 billion between 2001 and 2003.

Table 1: Operating revenue of European Union television companies (1999-2003) - EUR thousand

1999
2000
2001
2002
2003
United Kingdom
15 077 283
16 635 532
17 877 253
17 225 398
17 268 269
Germany
12 626 897
13 526 700
13 772 000
13 806 111
13 583 899
France
8 415 658
9 361 000
9 686 000
10 020 131
10 507 285
Italy
5 349 582
5 992 117
6 129 108
6 313 221
7 580 650
Spain
3 824 581
4 304 234
4 457 549
4 497 706
4 777 624
Netherlands

/Luxemburg
1 768 489
1 880 000
2 016 000
2 092 274
2 075 105
Sweden
1 011 630
1 069 791
1 080 744
1 205 736
1 300 418
Belgium
968 771
1 076 217
1 097 110
1 185 208
1 273 124
Austria
857 349
944 499
928 860
930 151
979 398
Greece
760 209
881 833
866 933
909 475
898 941
Denmark
715 084
793 849
823 052
856 687
888 700
Poland
763 004
986 292
1 151 026
1 023 188
862 386
Finland
554 121
580 160
581 059
578 182
581 091
Portugal
401 237
428 320
426 625
389 518
415 780
Czech Republic
283 759
284 026
312 879
330 769
354 891
Ireland
250 973
263 646
278 846
313 778
348 468
Hungary
207 721
244 676
276 068
305 737
n.c.
Slovenia
126 492
135 149
144 373
141 181
134 890
Slovakia
68 668
69 436
78 474
74 396
78 035
Lithuania
21 169
23 657
28 107
30 208
32 134
Latvia
14 383
21 979
22 118
21 015
27 711
Estonia
15 944
16 011
15 828
22 852
26 734
Malta
8 812
9 078
8 729
8 179
7 908
Cyprus
n.c.
n.c.
n.c.
n.c.
n.c.
EUR 25
54 093 815
59 530 202
62 060 742
62 283 103
64 292 515
Source : European Audiovisual Observatory
Graph 1: Yearly average growth of television companies in the European Union (EUR 25 - 1999-2003) - In %.

Table 2: Operating revenue of the different categories of television company in the European Union (1999-2003) - EUR thousand

 
1999
2000
2001
2002
2003
Public

broadcasters
25 188 375
26 068 185
27 171 695
27 357 839
27 440 565
Private

advertising

TV companies
17 272 044
19 479 894
19 001 825
18 220 058
18 292 527
Pay TV

premium

companies
3 156 856
3 343 030
3 641 581
3 698 639
3 332 345
TV packagers
5 153 822
6 724 909
7 646 472
8 221 956
10 274 679
Thematic

channels
2 290 292
2 732 000
3 247 638
3 374 132
3 405 301
Home

shopping

companies
1 152 060
1 324 325
1 465 000
1 659 117
1 782 814
Total
54 213 449
59 672 343
62 174 211
62 531 741
64 528 231
Source: European Audiovisual Observatory
Table 3: Rate of growth of the different categories of television company in the European Union (EUR 25 - 1999-2003)
 
2000/1999
2001/2000
2002/2001
2003/2002
Public broadcasters
3.5%
4.2%
0.7%
0.3%
Private advertising TV companies
12.8%
-2.5%
-4.1%
0.4%
Pay TV premium companies
5.9%
8.9%
1.6%
-9.9%
TV packagers
30.5%
13.7%
7.5%
25.0%
Thematic channels
19.3%
18.9%
3.9%
0.9%
Home shopping companies
15.0%
10.6%
13.3%
7.5%
Total
10.1%
4.2%
0.6%
3.2%
Source: European Audiovisual Observatory

A clear improvement in the financial situation as a whole, but very varied results according to country

On the whole, the financial situation of the television sector in the European Union improved markedly in 2003 and the first figures available for 2004 tend to confirm this pattern. There are three main reasons for this:

Following the general recession of the European economy in 2001, which was particularly evident in a drop in advertising investment, the economy began to grow again and advertising revenue increased in most countries (with the notable exception of Germany). Furthermore, digital television packagers (following the spectacular bankruptcies of ITV Digital in the United Kingdom and Quiero in Spain and the mergers between satellite platforms in Germany, Spain, Italy and Poland) are gradually reaching break-even point;

Operating costs have fallen, leading to a considerable improvement in operating margins, which rose from -3.8 per cent in 2001 to 0.5 per cent in 2003. The Observatory does not have sufficient information to analyse this reduction in operating costs in any detail. However, it can be assumed that the merger of digital platforms in several countries has reduced programme acquisition costs. Moreover, despite a few gaps, the Observatory has been able to analyse in detail permanent employment in European Union television companies: the total number of

employees rose from 189,800 in 1999 to 196,600 in 2003 (+3.6 per cent), reaching a peak of 198,400 in 2001 before dropping by 1,800 in the space of two following years;

The financial operations deficit was cut from EUR 1.4 billion in 1999 to EUR 120 million in 2003.

Table 4: Profit margins of national television systems in the European Union (1999-2003) - In %

 
1999
2000
2001
2002
2003
Denmark
-2.0
1.1
1.3
-0.8
10.4
France
3.2
5.9
6.7
5.7
5.4
Sweden
-4.4
-3.0
-9.2
-4.1
4.4
Estonia
-53
-31.1
-18.5
0.3
4.1
United Kingdom
1.3
-2.8
-7.9
-3.7
3.3
Germany
1.1
0.9
-3.0
2.4
2.2
Ireland
37.59
-5.38
-16.32
-7.39
0.30
Belgium
0.6
3.8
-0.1
-0.3
-1.7
Poland
-10.5
-18.1
-18.3
-42.3
-1.2
Austria
1.9
-2.4
-1.3
-5.1
-3.7
Netherlands
0.2
1.6
-7.2
-5.4
 n.a.
Italy
-4.2
-7.2
-12.1
-10.6
-6.9
Greece
1.9
-0.5
-2.4
-5.2
-7.2
Finland
-7.9
-9.8
-29.3
-21.9
-11.3
Spain
-13.8
-16.2
-24.1
-23.6
-15.4
Portugal
-20.9
-30.0
-70.5
-57.6
-17.5
Source: European Audiovisual Observatory

Digital packagers lead the way

The digital television packagers category, with an average annual growth rate of 18.8 per cent, has contributed most to the growth of the market. This growth was particularly strong at the start of the period under consideration (30.5 per cent), fell away in 2002 (7.5 per cent) and increased again in 2003 (25 per cent). However, it is expected to drop again in 2004 (between 3 per cent and 4 per cent), now that the impact of the launch of Sky Italia has worn off.

According to available data on the results of four companies in 2004, this group of operators should nevertheless, for the first time, achieve a profit margin of around 6 per cent compared to -4.5 per cent in 2003. However, the development of a free multi-channel service via digital terrestrial television could curb the growth of digital pay-TV platforms in the coming years.

Table 5: Profit margins of the different categories of television company in the European Union (1999-2003) - In %
 
1999
2000
2001
2002
2003
Public broadcasters
-1.5
-2.7
-2.7
-4.6
-1.5
Private advertising TV companies
15.2
18.0
9.6
7.2
10.2
Pay TV premium companies
-0.1
-3.9
-2.6
-1.7
4.5
TV packagers
-45.4
-49.7
-49.5
-22.8
-9.6
Thematic channels
-6.1
-12.2
-19.7
-10.1
-10.8
Home shopping companies
0.1
-5.5
-8.4
-5.6
-0.9
Total
-0.5
-1.8
-5.7
-3.7
0.4
Source: European Audiovisual Observatory

Latest Reads

http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/12/08/zee-studio.jpg?itok=1xtV1Jhc
Zee Studio to premiere the post-apocalyptic horror drama - MAGGIE!

Zee Studio, the hollywood movie destination, brings the Indian television premiere of Maggie. Starring multi-award winner Arnold Schwarzenegger and Academy Award-nominee, Abigail Breslin, this post-apocalyptic drama premieres on 10 December 2017, Sunday at 12 noon and 9 pm.

Movies Hollywood
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/12/01/sanjay.jpg?itok=sJJUMOP8
Demonetisation, decline in govt ads impact UFO Q2 numbers

BENGALURU: Indian digital cinema distribution network and in-cinema advertising platform UFO Moviez Ltd (UFO) reported a 12.8 percent year-on-year (y-o-y) decline in consolidated operating revenue for the quarter ended 30 September 2017 (Q2 FY 2017-18) as compared with the corresponding year ago...

Movies Movies On Mutiple Platforms
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/11/25/Madhavan_0.jpg?itok=AcPIL5R4
The modern day economics of film financing

Only 2 per cent of the total movies released in 2016 in the US were computer graphic (CG) animation, yet they grossed more than 21 per cent of the US box office collection. Strong animation brands have longer shelf-life and generate revenue for years.

Movies International
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/11/24/Posto.jpg?itok=TKLdU5Bl
Bengali film Posto to premiere on Hoichoi before satellite TV

NEW DELHI: Digital Bengali entertainment content platform Hoichoi has acquired exclusive digital rights of this year’s most successful Bengali feature film Posto, ensuring it a world digital premiere today before a satellite TV premiere. This will provide Bengali moviemakers a robust additional...

Movies Regional
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/11/16/pvr_0.jpg?itok=UZKfyV-h
PVR acquires minority stake in US luxury theatre chain

PVR Ltd (PVR) will acquire a minority stake in US-based luxury restaurant and theatre iPic-Gold Class Entertainment (iPic).

Movies Hindi
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/11/15/sunil-lulla_1.jpg?itok=sqgylncT
Eros reports higher profit margin despite fewer releases

BENGALURU: Sunil Lulla-led Eros International Media Limited (Eros) reported 21 per cent margin (on operating income) for consolidated profit after tax (PAT) for the quarter ended 30 September 2017 (Q2 FY 2017-18) as compared with 12.8 per cent margin for the corresponding quarter a last ago. The...

Movies Hindi
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/10/31/inox1.jpg?itok=CpHFAdho
Inox reports increase in revenue, profits for second quarter

BENGALURU: Indian cinema chain Inox Leisure Limited (Inox) has reported improved revenue and net profit after tax (PAT) for the quarter ended 30 September 2017 (Q2-18, current quarter) as compared to the corresponding quarter of the previous year (Q2-17, year ago quarter). Inox revenue from...

Movies Hindi
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/10/31/Grand-Challenge.jpg?itok=Eg01vsKl
1700 films received on ending violence against women film contest

NEW DELHI: Around 1700 entries from over 600 colleges have come in response to a campaign launchged earlier this year for two-minute films on generating debate and promote positive change in cultural and social norms around the value of women in India. The campaign ‘#BasAbBahutHogaya – Enough is...

Movies Hindi
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/10/28/TP_Aggarwal.jpg?itok=WSDOM3Rj
Reduce GST on film industry, IMPPA pleads to FM Jaitley

NEW DELHI: The Indian Motion Pictures Producers Association (IMPPA) has urged the government to fix 5 per cent as the maximum GST rate that should be charged on all goods and services connected with the entertainment industry including entertainment tax.

Movies Hindi

Latest News

Load More

Sign up for our Newsletter

subscribe for latest stories