There was a time, not so long ago, when the chief competitive worry for a European broadcaster was the network down the street — the one with the slightly better game show and the marginally more appealing newsreader. That era now belongs to the same historical cabinet as the fax machine and the cigarette commercial.
In little more than a year, Europe's television sector has produced a burst of dealmaking that would have seemed fanciful a decade ago. Comcast-owned Sky has agreed to acquire ITV's broadcast and streaming operations in Britain for $2.1 billion. RTL in Germany is combining its free-to-air network with Sky Deutschland. The Berlusconi family's MediaForEurope has taken control of Germany's ProSiebenSat.1, adding it to a portfolio that already includes Italy's Mediaset and Spain's Telecinco.
The logic is not subtle. European broadcasters are no longer competing principally with one another; they are competing with Netflix, YouTube, Amazon, Disney, TikTok and Meta — companies whose balance sheets make even the largest European television groups look like regional theater troupes. (One does not need a doctorate in economics to observe that this is an unfavorable position.)
The numbers explain the urgency. In Britain, daily viewing of public service broadcasters among 16-to-34-year-olds has fallen from 95 minutes in 2015 to 21 minutes today. Meanwhile, the median budget per minute for high-end scripted television has risen by roughly two-thirds over the past decade. Fewer young viewers, weaker advertising, higher production costs — the mathematics are not encouraging.
"Consolidation is a rational response to the challenges facing legacy broadcasters," said Cleodie Kilgour, an analyst at Enders Analysis. "European networks need scale within their own markets to fund flagship productions, accelerate digital transformation and secure critical prominence on connected TV platforms."
The strategies vary by geography. RTL and Sky are betting on national champions — combined pay and free television operations large enough to matter domestically. MediaForEurope, controlled by the Berlusconi family, is attempting something more ambitious: a pan-European advertising platform that might one day sit across the negotiating table from Google without feeling entirely outmatched. "We might not cover the globe, but we do most of Europe," is how the independent analyst François Godard characterized the pitch.
Others have chosen a different path entirely, partnering with the very platforms that disrupted their business models. In France, TF1 has struck a deal to place its live broadcasts and on-demand content directly on Netflix — a collaboration that excites and unnerves the industry in roughly equal measure.
The tension is obvious. Broadcasters need global platforms to reach audiences who have stopped watching broadcast television. They also need sufficient scale to avoid becoming mere content suppliers inside someone else's ecosystem — losing control over viewer data, monetization and the brand identity they have spent decades constructing.
Regulators, meanwhile, face their own dilemma. The framework governing European media was built for an era when the biggest threat to competition came from another national broadcaster, not from a global platform headquartered in California. A report last year from Mario Draghi, the former European Central Bank chief, suggested the European Union should relax merger rules to make them "fit for the new realities" of global competition.
Whether those changes can come quickly enough remains uncertain. The broadcasters are not waiting to find out.
Original story published in The Hollywood Reporter: "Europe's Broadcasters Want to Get Bigger. The Hard Part Is How."