Online TV grows in Europe, broadcasters face threats

Posted by Erina Lin on May 30, 2008 at 7:40 PM

A question has arisen again and again for a long time: How will old and new media converge? According to Karin von Abrams, eMarketer senior analyst and author of the new report, Web Television in Europe: An Expanding Scene, "Broadcasters have no choice but to embrace new technology and delivery channels, but they are desperate to ensure they can still monetise their content, even when they are no longer monopoly distributors."

By January 2007, about one-half of all broadband users in France, Germany, Italy, Spain and the UK were already watching TV online over high-speed connections, according to a study by Motorola.

Another report from European Interactive Advertising Association (EIAA) also found that 30 percent of online users in 10 major European countries were watching TV, film or video online.

Moreover, as of February this year, over one-half of British adults ages 16 and over with Web access said they had watched TV online. One out of five had watched full-length TV shows, movies or sports, according to Blinkx.

It is obvious that the potential for online TV viewing throughout Europe is huge, and keeps on growing, according to eMarketer.

"Unfortunately, while online users are viewing more content, producers, broadcasters and advertisers are seeing little return on their online TV ventures," said von Abrams. He pointed out that proven formulas to monetize from TV content are under threat.

"Historically, broadcasters' profits have depended on restricted access to their material—viewers had to tune in to a broadcaster-owned channel and watch advertising that covered the costs of program production, promotion and distribution. Advertisers paid a lot to be seen in prime TV slots on these channels, and (until video recording arrived) viewers could not avoid seeing ads," he said.