Europe's TV biz bouncing back
Broadcasters see improved financial stabilityRelated: Local film ties tenuous in Europe
Against the odds, the European TV biz that started the year on life support is closing out 2009 with definite signs of recuperation.
A year of recession across Europe's major markets seems to have driven audiences indoors, onto the couch and in search of feel-good entertainment.
Across the continent, juggernaut entertainment formats have dominated primetime ratings, giving audiences the high-gloss entertainment and talent thrills that they still seem to love.
Terrestrial broadcasters like Britain's ITV and Germany's RTL are basking in the ratings glow of tried and tested shows such as the "Got Talent" format and "Who Wants to be a Millionaire?"
The record rating U.K. finale of season six of "X Factor" -- which delivered 19.1 million viewers for commercial net ITV1 -- attests to the fact that when it comes to fluffy entertainment, the free-to-air terrestrial networks are still the only game in town.
At the same time, debt-free pay TV operators like Rupert Murdoch-backed BSkyB have weathered the financial storms far better than their advertising-driven counterparts, and are wooing new customers with a blend of sport, movies, U.S. series and high tech HD, on-demand and even 3D TV services.
Twelve months ago, the industry was in the intensive care unit as terrestrial broadcasters across the continent found their ad revenue hemorrhaging.
The struggle to restructure their balance sheets has been a painful one, with round after round of forced job cuts leading to the loss of thousands of jobs that may have left the sector forever.
But the upswing in the financial markets since March has returned a cautiously healthy glow to the erstwhile pallid sector, stabilizing balance sheets, shoring up pension shortfalls and offsetting the need to auction off high value assets as part of debt-driven fire sales.
Broadcasters like Britain's ITV, France's TF1 and Germany's RTL move into 2010 with markedly improved financial stability and share prices across the sector continue to rise.
From an all-time low of just 16.5 pence (26 cents) in March, ITV has moved up to the 52 pence (84 cents) mark on a combination of bid speculation, market optimism and improved on-screen performances.
TF1, France's biggest media company, has seen its ticker price move up from its lowest ever performance of €5.20 ($8.30) in the first quarter, to reach the final furlong of 2009 trading almost threefold higher at €13 ($21).
Meanwhile, RTL, the big daddy of European broadcasting with some 22 terrestrial stations, saw its shares double from a low of €24 ($34) to almost twice that.
Murdoch continued to pour money into Sky Deutschland, though the German pay player still seems a long way from black ink. Sky's losses are likely to hit $900 million this year and direct subscriber numbers aren't much above what they were when News Corp. bought into the platform last year.
The pain of a contraction in broadcasters' spending has been felt across the production industry, where commissioning cutbacks have meant a tough ride for the indie production sector.
The fall-off in commissions is estimated to be £600 million ($968 million) in the U.K. alone.
For indies, survival increasingly means building out their own geographical production network so they have their best shot at getting a local market commission down to perfection.
The past year also saw Elisabeth Murdoch's Shine Group expand horizontally into France, Germany, Australia and the Nordic regions, following a model already deployed by reality kings Fremantle and Endemol.
Scandi boutique Yellow Bird and French giant Banijay all launched German production outfits this year, while Endemol has joined forces with hot young Munich producers Max Wiedemann and Quirin Berg to set up a joint production venture to focus on drama formats for the local market. Undeterred by the increasing Germanic competition, BBC Worldwide and All3Media also launched a joint venture, Tower Prods., to produce Teutonic versions of BBC TV formats.
Endemol also stunned the U.K. TV industry by acquiring "Billy Elliott" producer Tiger Aspect and "Touching the Void" factual specialist Darlow Smithson, in a move that gives it a strong drama, comedy and factual footprint in the U.K.
Elsewhere, John Malone's Liberty Global ponied up $5 billion for German cable group Unitymedia -- finally snagging a piece of Germany's cable business seven years after watchdogs vetoed his planned deal to buy Deutsche Telekom's massive network.
In the U.K., on-again off-again talks between the BBC's commercial arm and government-owned Channel 4 seem to be on hold, with no real resolution in sight. But if advertising markets continue to shrink, some sort of tie-up, possibly even between ITV and another free or pay broadcaster, could be in the cards.
Mergers and consolidation will likely be a theme throughout the next year, though the best hope for the biz is that global financial markets remain stable and that there is no repeat of the market collapse that decimated confidence 16 months ago.
Mimi Turner reported from London; Scott Roxborough reported from Cologne, Germany.