The European television industry is one of the most balanced in the world, with public service broadcasters, advertising-supported broadcasters, and pay television operators reasonably dividing television revenues among themselves. For the 27 countries of the EU, pay TV accounts for about 38% of total revenue, public funded broadcasters for about 34%, and advertiser supported television for about 28%.
Unlike the US where private television dominates, most Europe private television began after liberalization broke the monopolies held by public service and state television in most countries. It has taken decades for private television to establish a mature place in the market.
When looking specific countries, however, total spending on TV (advertising, subscriptions, public funding) is not evenly spread. Adjusted for population, it ranges between €5 and €30 per person among nations, with an average of €15. There a notable differences between southern, central, and eastern European nations and nations in the north and west of Europe, where public service and pay TV are strong players.
Some markets are skewed with unusually strong TV subsectors. In Germany and Sweden publicly-funded TV is unusually dominant; there is unusually poor performance of advertising-funded TV in Bulgaria, Estonia, Hungary, Latvia, Montenegro and Romania.
Today, pay television is the most positive sector in European television, with subscriptions for basic services and payments for video-on-demand services growing and the sector benefiting from the growth of video viewing on smartphones and tablets, particularly for its original programming.
Advertising-supported television is being squeezed between the more stable funding of public service broadcasters and pay TV providers and being hurt because advertisers in some countries remain reluctant to accept catch-up viewing in audience measurements for program broadcasts. It is not benefiting as much from video-on demand services as public service and pay TV broadcasters because much programming on advertising-supported TV is not original production owned by the broadcasters.
In order to survive in the new television environment, advertising-support TV in Europe has developed a diversified revenue, combining income from advertising, paid programming (home shopping, religious programming, etc.), product placement, sponsored events such as concerts and fairs, telecommunication promotions and services related to programming, income producing contests and lotteries, and renting studio space and providing video production services for advertising and corporate use.
Despite find their niches, both advertising supported and pay TV operators are now mounting efforts to obtain public funding to improve domestic program offering. In a number of countries they are asking policymakers to create contestable public funding to produce quality domestic content. They have asked cultural ministries to set aside funds for the purpose or asked regulators to divert portions of public service license-fee payments for the purpose.
In the contemporary environment, the business model of European advertising-supported TV needs significant addition, primarily because traditional TV advertising has low value for both viewers and advertisers today and there is a need to seek news ways to connect the two commercially. The extent to which they will rise to the occasion remains to be seen.