A report on the state of play of pay services in Europe suggests that while the expansion of online video subscription services over the last decade has not reduced increases in revenues for the overall audiovisual services market, it did capture most of them. It says that subscription television has been thriving in some countries and cord cutting depends on factors in different national markets and is not a pan-European experience.

The report on Pay AV Services in Europe is published by the European Audiovisual Observatory.

Subscription services accounted for 40% of the audiovisual services market in 2017, with pay-television representing 90% of that and subscription video services the remaining 10%. So subscription online video services represented just 4% of the audio visual market.

The report notes that the surge of online video subscription services did not cause a significant slowdown of the pay services market but did capture most of the revenue growth.

It suggests that each national market in Europe is still shaped by very specific conditions, including purchasing power, the supply of free services, the penetration and performance of broadband access, and regulation.

There are significant differences in levels of adoption of pay television and subscription video services across Europe.

Pay television penetration in the United Kingdom at around 65% is below the European average level of around 70%, while adoption of subscription video is the third highest in Europe at around 57%, well above the average of about 25%. In both cases the revenues are the highest in Europe.

Three countries account for 46% of the pay-television and 52% of the online video subscription market in Europe: The United Kingdom, Germany and France.

European pay AV revenues 2017. Source: European Audiovisual Observatory.

The report finds that Netflix, Comcast and Liberty Global controlled a third of all subscriptions to pay audiovisual services across Europe in 2017. Almost 1 in 3 pay-TV subscriptions were either to Liberty Global (UPC, Ziggo, Virgin TV, Telenet, Unitymedia TV) or Sky (now part of Comcast), while Netflix and Amazon alone accounted for almost 80% of the online video subscriptions in the European Union.

The term ‘Pay AV’ is an interesting one and reflects the emphasis of the European Audiovisual Observatory. While viewing pay television and subscription video as a part of a larger audiovisual services market, the report does not distinguish that they often play complementary roles.

Furthermore, households many subscribe to multiple online video services, as well as pay television, but they generally only have a single pay-television subscription. In some cases this also offers access to online video services.