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Subscription TV Drives Growth in European Biz

Subscription spending reps 34% of U.K. film, TV revenues

LONDON — Subscription services are driving revenue growth in film and television, which account for nearly 50% of total revenue for the creative industry in Europe, according to a report from global management consulting firm Booz and Company.

The report, commissioned by Creative England and Google, looks at the economic impact of digitization and the Internet on the creative sectors in the U.K. and Europe. It covers the film and TV biz, gaming, book publishing, music and the press.

The study reveals that while the creative sector as a whole has grown around 2% annually between 2001 and 2011 across the 27 member countries of the European Union, the film and TV sector has seen a compound annual growth rate of 4%. The total value of the EU creative industries in 2001 was €170 billion ($218.9 billion) of which $80.4 billion came from the film and TV industries. By 2011 this had grown to $256.2 billion, despite losses in music and print publishing. Film and TV accounted for 46.3% of this with $118.5 billion.

The report suggests an increase in subscription revenues, including premium cable and Internet protocol TV (IPTV) channels, are the driver of the film and TV growth. “Overall, this industry has benefited dramatically from the digitization of distribution networks, like IPTV and digital terrestrial television, as well as from the growth of new services such as YouView, Maxdome, iTunes and Apple TV,” the report states. Subscription revenues across the E.U. grew by nearly $25.8 billion between 2001 and 2011, generating approximately 2.5 times the revenues of 2001, with many consumers switching from a free-to-air television supply model to a paid model, attracted by HD channels, VOD, premium content and more.

Subscription spending was also the key growth driver in Blighty, reaching a 34% share ($7.7 billion) of the U.K.’s total film and television revenues ($22.5 billion) in 2011.

The games industry has seen a compound annual growth rate of 11.3% from $4.6 billion in 2001 to $13.5 billion across EU countries in 2011. Online gaming has been a key driver since 2008, and accounted for nearly a third of 2011 biz with $3.9 billion in revenues.

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