CTV and OTT Race in the European TV Space: Challenges and New Growth Points

Anna Kuzmenko Fiksu

On TV & Video” is a column exploring opportunities and challenges in advanced TV and video. 

Today’s column is by Fiksu COO Anna Kuzmenko.

Throughout the past decade, viewers’ rising demands for streaming services and their changing viewership habits have been transforming the European digital TV market.

AVOD in the European digital TV market

AVOD is a relatively recent phenomenon in the European content sector.

Pluto, Samsung TV Plus, and Rakuten have lately entered Europe’s TV marketplace. View by view, they are scaling their potential across the European audience.

However, this expansion will be complicated by the fact that European viewers can also consume video content from local broadcasters. In the UK, viewers have access to Channel 4 and Sky. In Spain, there is Antena 3 and Atresmedia. In Germany, there is Joyn and TVNOW. In France, viewers can find streaming apps from M6, TF1, and Molotov TV.

Advertisers need to make the most out of the current situation. As streaming services compete with linear TV advertising players, they have one trump card. They’re obtaining user data which can be later deployed for granular and more personalized targeting.

SVOD in the European digital TV market

SVOD penetration in Europe is also skyrocketing.

In the last decade, SVOD revenues have increased from 2.1 million Euros to 9.7 billion Euros, driven by international platforms like Netflix, Apple TV+, HBO and Amazon Prime Video. Local streaming services like Turkcell, Now TV and Tivibu are keeping pace by reinforcing their positions and looking to expand their share of the European market.

The number of subscriptions is expected to double from 10.26 million at the end of 2019 to 26.42 million in 2025 in Eastern Europe. This is due to the launch of new streaming services in the European Union, including Disney+ and local SVOD players like French group Salto and Britbox, a joint venture of the BBC and ITV.

CTV and OTT scale is near.

New players entering the CTV and OTT market should remember that the CTV audience in Europe is rather fragmented. Linear TV is still widely used. The UK and Germany have the highest rate of CTV penetration, with 40% of households owning at least one OTT device.

This level of penetration means CTV and OTT should be regarded as a complement to traditional TV, not a replacement. From this perspective, CTV and OTT allows content to reach not just more households, but under-exposed, TV-owning households as well.

Advertisers should be aware of the share of viewership going to linear TV vs. CTV when building campaigns. That means focusing on the linear component while gradually reaching into the digital TV space – without overlapping targets. Advertisers also need to check whether their partners are ensuring sufficient scale in their CTV and OTT audiences. That scale is needed to optimize reach.

What does the future hold for CTV in Europe? 

CTV in Europe lags behind North America. As The Drum indicates, 80% of US households had at least one connected television in 2020. Pre-COVID, streaming services delivered nearly 20 billion minutes. This rate is much lower in Europe. Only 50% of the CTV audience in Europe watched streaming content daily in 2020.

To bring up the level of CTV and OTT penetration in Europe, The European Connected TV Initiative is scrutinizing the advertising opportunities created by the growth of CTV in Europe. The who’s-who of participants includes Google, Roku, Fincons Group and IPONWEB. The group is figuring out how to preserve the consumer experience in CTV with non-intrusive and appealing creatives.
Measurement remains a focal issue for CTV advertising.

Linear TV and connected TV gauge performance through different approaches. Standards for targeting, campaign reach, and performance across linear, addressable, and CTV (VoD or simulcast) viewing have not yet been reached.

Once those standards are in place, advertisers, content creators, and broadcasters will be able to target based on viewing habits, registration data, and ACR technology. Data-driven ad campaigns on CTV in Europe are close to being in our grasp.

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