- Share this article on Facebook
- Share this article on Twitter
- Share this article on Email
- Show additional share options
- Share this article on Print
- Share this article on Comment
- Share this article on Whatsapp
- Share this article on Linkedin
- Share this article on Reddit
- Share this article on Pinit
- Share this article on Tumblr
The coronavirus pandemic will result in around €10 billion ($12 billion) in lost revenue for Europe’s audiovisual industries this year, according to estimates in a new report by thinktank the European Audiovisual Observatory.
Gilles Fontaine, the report’s author, says the economic effects of COVID-19 have created “a perfect storm” with revenue falling across all areas of the media sector, with the notable exception of online streaming services. Overall, the report estimates that total revenue across the television, film, and home video sectors in the 27 markets of the European Union will amount to €80.9 billion ($95 billion) in 2020, compared to €90.8 billion ($107 billion) last year.
Fontaine sees some recovery in 2021 but is still forecasting overall revenue of €85.2 billion ($100 billion), significantly less than the sector generated in 2019.
Unsurprisingly, cinemas and commercial television stations —the latter hit by a sudden drop in advertising revenues when most of Europe went into COVID-19 lockdown in March —have borne the brunt of the losses. The report estimates TV advertising in the EU will be down 20 percent year-on-year in 2020, and cinema box office will fall a precipitous 70 percent compared with 2019 figures.
In contrast, subscription video on demand revenues in Europe are forecast to jump 30 percent this year and pick up pace in 2021, with Fontaine estimating a further 60 percent increase.
Fontaine noted that the data used in his model were all estimates, based on different sources, and should be seen as providing a “big picture” analysis of Europe’s media sector, not the final word on the matter.
Most worrying for legacy players —cinemas, theatrical distributors, and broadcast TV channels — is Fontaine’s contention that COVID-19’s negative impact on the business looks likely to continue through 2021. The report estimates box office revenues in the EU next year will be fully 40 percent lower than in 2019. TV ad revenue is expected to bounce back, but overall sales, the report forecasts, will still be eight percent lower next year compared with pre-coronavirus figures.
The report sees a significant impact on the financing of original content — for both film and TV — in Europe as a result. Overall, it estimates European players will have €3.5 billion ($4.1 billion) less to invest in original series and feature films. Recent increases in European original production by streaming services such as Netflix and Amazon Prime will not make up the difference, the study finds. Streamers accounted for less than two percent of total original content financing in Europe in 2019, the report estimates, and even factoring in a projected increase in EU originals spend by the big platforms — to around €500 million ($588 million) in 2021—they would still account for less than five percent of the €15.7 billion ($18.5 billion) invested across the entire sector in European originals.
Sign up for THR news straight to your inbox every day