Despite significant changes in people’s video viewing habits over the last few years, the TV platform landscape has appeared to have reached an equilibrium.

We expect pay-TV to retain its utility status for most existing customers. At the margins, movement from Sky and Virgin Media to free-to-air or pay-lite services will be mitigated by population growth.

The excitable growth phases for Netflix and Amazon are likely to be over, but they have carved out prominent positions in the market. Meanwhile, the uncomplicated allure of free TV remains strong for half the UK.

This third edition of Europe's Creative Hubs, produced on behalf of Bertelsmann, highlights the challenges of the digital age for enterprises of the creative industries of France, Germany and the UK from new consumer behaviours and the advent of new competitors and new forms of competition for users and customers from tech giants, Amazon, Facebook, Google and Netflix. The report calls upon policymakers in Europe to ensure a level playing field for traditional media in the key areas of taxation, competition law, privacy and data protection, highlighting the interaction of these three in the market for online advertising.

The UK continues to lead the EU5 in take-up and consumption of video-on-demand services, with close cultural alignment and a historic williness to pay for TV content making it a receptive home for US SVODs

Netflix dominates in most markets, benefiting from high-profile US imports and big-budget local productions. Local SVODs are struggling, with those operated by FTA broadcasters facing considerable challenges

Collaboration between local broadcasters and pay-TV platforms is essential if they are to hold at bay the threat of Netflix and co., with an increasingly favourable regulatory environment opening the door for unprecedented collaboration

Engineering excellence and user generated content (UGC) have propelled YouTube to Facebook-level reach, with growing viewing in all demographics and on the TV-set

However, the commercial limits and PR risk of its long-tail content model have prompted a diversification effort involving subscriptions and long-form content

Becoming a major part of Google’s revenue amid fierce OTT competition would require YouTube to be more flexible in its partnerships with the AV industry, and a more aggressive go-to-market strategy

The US scripted content boom is spilling over into Europe: Free-to-air TV drama ratings have proven resilient but as costs and audience expectations have risen budgets are under pressure, necessitating flexible co-financing arrangements with American broadcasters, and Netflix and Amazon. Pay channels have boosted output—with uneven results

Long-term IP control is a key factor behind independent production consolidation, led by broadcasters seeking a secure stream of content and diversification away from advertising

Notable developments include the new wave of Berlin-based, internationally-financed series, the rise of domestic French content and Sky Italia’s edgy originals, Telefónica’s giant leap into Spanish dramas, and the continuation of Britain as an export powerhouse

The “fair return” to US music publishers and songwriters for rights used by interactive streaming services will be decided in 2017 by the Copyright Royalty Board (CRB)

Rights owners want to switch to a fixed per-stream or per-user rate on all tiers, arguing music has an inherent value. Apple is asking for a much lower per-stream rate

Amazon, Google, Spotify and Pandora warn of disruption to free and ad-supported tiers if the revenue-share tariff is not rolled over, and the CRB could side with them

The past 14 months have seen a flurry of activity from the major UK television platforms, with all but one releasing a revamped version of their television offering; a neccessary reaction to the rise of VOD consumption and the threat this poses to traditional models

The result is 'connected' offerings, with the major players aiming to exploit the impact of this technology by seamlessly integrating on-demand capabilities, and in doing so mitigate the further shockwaves resulting from its emergence

No offering is likely to single-handedly alter the current subscriber landscape radically; with the pay platforms' each taking a unique—and to a degree—entrenched path that affirms its core consumer base, the greatest shifting of sands will likely come from changes in consumer trends or content quality

Music publishing revenues are trending up in a broad sustainable manner across the US, Europe and Japan, underpinned by longstanding music rights regimes

Purchasing is down and streaming taking off, driving a mechanical to performance transition, with direct licensing of Anglo-American repertoire in Europe as in the US

Public performance revenues collected by PROs are also rising as live music grows, general business conditions improve, while TV audiences remain resilient

Europe's Creative Hubs 2016 was commissioned by Bertelsmann and produced by Enders Analysis. 

Germany remains the second largest market in Europe for the exploitation of composition rights by their authors, with €382 million paid out to them in 2014, up 8% on 2013 (63% share of distributions on average). The German Government intends to secure an even “better balance for authors” in their contracts with music publishers, by allowing the composer to “re-tender” their contracts after five years to secure a better deal

GEMA, the collecting society, has a strong position in Germany and is poised to lead the development of the digital single market for online music services. Together with PRS for Music (UK) and STIM (Sweden), GEMA has formed a joint venture (JV) to offer multi-territory licensing and copyright administration services to services, music publishers and other CMOs, cleared by the EU Commission

Music publisher revenues from domestic collections could rise from €225 million to €247 million from 2014 to 2017, due to a moderate rise in broadcast revenues on the back of the economic recovery, a boost to public performance revenues from a higher live music tariff and flat royalties from recorded music expenditure, as the decline of physical mechanicals is offset by the rise of online royalties