The European TV market has seen a “trend reversal” over the past four years, resulting in not only fewer episodes per season, but also less production as overall episodes have become shorter, according to the latest data from the European Audiovisual Observatory presented at Seriesmania in Lille, France, on Tuesday.
Agnes Schneeberger, TV and VOD market analyst at the European Audiovisual Observatory, discussed the “main trends in the TV and VOD market” and said the trend reversal followed “uninterrupted growth that peaked in 2022.”
“After this growth peaked in 2022, the trend reverses in 2023,” Schneeberger explained. “This downturn was preceded by earlier development. So what we’re seeing is that the development of TV series hours is lagging behind the TV seasons. So the number of series watched in hours hasn’t kept up with the actual seasons.”
“What does the time interval between seasons mean? Firstly, the number of episodes per season will be reduced. And secondly, on the other hand, the length of the series’ episodes will be significantly shorter.”
But Schneeberger pointed to three clear trends compared to the state of premium TV production in the U.S.: “First, there has been significant growth in Europe. Second, production in the U.S. has experienced a significant decline. And third, streamers are investing more in Europe than in the U.S.”
Also weighing in on the discussion, Sinove Holsdal, producer and CEO of Norway’s Maipo Film, agreed that “the boom is probably over,” but stressed that “TV series will survive and, hopefully, flourish even more than they do now.”
Holsdal recalls that when he first started working, it was difficult to raise money for 13 episodes, which at the time was considered the number needed for international distribution. “Then it went down to 10, then down to 8. I think that’s normal, but everyone says 6 is fine. So it’s more than half what it was before.”
Horsdal points out that in Scandinavia, broadcasters don’t care about airtime. “We need to reduce the number of episodes and hours to make room for the budget.”
Robert Franke, managing director of Berlin-based Intaglio Film, said the observatory’s findings “perfectly illustrate some of the trends that we’ve been exposed to and experienced over the past few years. One is the venture capital driven growth in the streaming industry, which has basically been a way for these big multinationals to gain market share.”
To gain market share, international streaming platforms need to enrich their catalogs and offer attractive offers to end users, Franke explained.
“After COVID-19, that stopped because people started going outside again and living real lives instead of being glued to their TV screens and living precariously.”
Moreover, now that market share has been dispersed, “there was nothing left to gain. And what’s the reaction to that? Obviously, everyone is starting to focus on profitability, and whether or not the investment in original content is really worth it becomes secondary.”
The second trend, Franke added, is “the democratization of content production and the pressure that we, as TV producers, are feeling from the creator economy.”
For example, he pointed out that the decline in episode count and episode airtime reflects a younger demographic that isn’t particularly interested in being tied down to a 10- or 12-episode TV series.
In addition to TV and VOD production, the wide-ranging discussion also touched on many other topics, including production incentives, international co-production, industry structure, and YouTube’s growing influence.
Examining the role of incentives in theatrical film production, Schneeberger said that incentives are “rapidly gaining momentum” and are “on track to become a major resource in film financing.”
Horsdal said Scandinavian countries have been slow to introduce tax incentives for the film and television sector, noting that Norway was the first country in the region to introduce tax incentives, albeit with very limited programs that quickly run out.
“I don’t think it’s working very well in terms of getting people there.” But European tax incentives are crucial for Norwegian producers working on international co-productions, she added.
“Increasingly, we find ourselves in an environment where fundraising is, in some ways, an elaborate chess game,” Franke said. “You try moving pieces around the field and see if you get results. You also need to know what the field is like and understand how the tax benefits are actually triggered in terms of payments.”
Franke cautioned that producers should be careful about using incentives as a simple percentage of a financing plan without carefully considering whether it makes sense to bring a project to a particular region for financing. “Does your project actually match the area? Does it make sense to go there?” Producers often don’t consider details such as travel costs, infrastructure, and studio vs. location filming, he added.
“I would say that as an industry we still have a lot to learn about how these tax incentives actually impact productions. I have seen many projects fail because producers applied their financing strategies in a less professional manner and did not properly match the available tax incentives.
“Having said that, this is probably the most important funding vehicle other than the broadcaster’s contribution.”
Turning to international co-productions, Schneeberger noted that the share of high-end television series has remained relatively stable over time and is much lower than the theatrical film sector.
As of 2024, the share of international co-productions in high-end TV and SVOD series is 12%, which is far below the share of international co-productions in theatrical films (ranging from 20% to 25%).
“It makes me think that perhaps television is becoming less willing to compromise with the tastes of viewers across the country,” Schneeberger said.
She emphasized the difference between “linguistic co-production,” which is work produced primarily between neighboring countries that share the same language, and “non-linguistic” or “true co-production,” which is between countries that do not share the same language.
Interestingly, the share of true collaboration is increasing at a much faster pace than linguistic collaboration, she added, noting that true collaboration accounts for two-thirds of the share.
Looking at the overall industry structure, consolidation and number of production companies, Schneeberger said that in 2024, “there will be 755 companies actively involved in the production of television and SVOD fiction in Europe, representing around 40% of new entrants to the market.”
Over the past decade, concentration had been decreasing until production slumped in 2023.
“Over time, the largest group of 20 companies lost some of their share, which meant that smaller companies emerged.However, from 2023 onwards, the top 20 companies started to regain some of their market share.”
He added that the change comes amid a shrinking market as companies cut their budgets. As a result, long-term contracts were entered into between broadcasters and producers to save costs and increase stability, favoring the big players and once again increasing their market share.
One of the major companies whose market share has increased dramatically in recent years is YouTube.
In 2020, YouTube ranked 8th in Europe with revenue of 4.4 billion euros. By 2024, it will generate revenue of 9.7 billion euros, making it the third-largest company behind Comcast and Netflix.
“What we can say is that YouTube has become a significant player in the audiovisual space,” Schneeberger said. “Before 2020, you could say that the old order was still in place when it came to screen entertainment. You had national broadcasters, you had cable companies, you had some European streamers, and yes, there was Netflix, which reigned supreme in SVOD. And back then, YouTube was a quirky corner of the internet known for things like cat videos and music playlists. But by 2024, what we’re seeing is a real seismic shift.”
Since then, advertisers have “flocked to the platform, drawn to its rich targeting capabilities and younger audience,” she added. “The landscape has changed and YouTube’s footprint has become almost impossible to ignore.”
In fact, Franke previously said, “We have to accept the fact that things are not going to be the same.”
He added that YouTube is taking a lot of viewing time away from traditional broadcasters. As a result, cost per thousand (CPM) is decreasing among commercial broadcasters. “Essentially, there’s not enough aggregate reach for content, so advertisers are moving their budgets to where they can put their budgets to better use. And on the public side, we’re facing an aging population.”
As a result, many pub broadcasters are losing young viewers and are suffering.
Pointing to the growing importance of YouTube, Franke predicts that producers will increasingly move towards B2C, “and YouTube is a tool for that. It’s an ecosystem where you can reach your audience directly and bypass traditional funding models. But you also need to understand how to activate those audiences on the platform, and that’s a toolkit that you have to develop.”
For Hørsdal, finding a YouTube role with Maipo Film was difficult.
“I have to be honest with you. Yes, we’ve looked into it. We’ve talked to YouTube. We’ve looked at different avenues. … From where we are now, it’s very difficult to see how we can start and publish[something]on YouTube.”
