Audiovisual media revenues in Germany to pass €11bn this year

Monday, October 24th, 2016 
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VPRT Forecast for the German Media Market in 2016

  • Audiovisual media to generate more than 11 billion euros in revenue for the first time, significantly exceeding last year’s forecast

BERLIN — This year, Germany’s audiovisual media will for the first time generate more than 11 billion euros in revenue. Across all the industry’s market segments (radio and audio, as well as TV and video), the Association of Commercial Broadcasters and Audiovisual Services in Germany (VPRT) is forecasting revenue growth of 6.2 percent or 650 million euros, to reach a total of 11.1 billion euros. This is the conclusion reached by the annual market forecast prepared by VPRT which was presented today by the Association ahead of the Medientage München. In 2015, revenue generated by the audiovisual media rose by 730 million euros (+ 7.5 percent) to 10.4 billion euros. As a result, the 10 billion euro mark was topped for the first time last year, this again being significantly higher than the 5.5 percent growth last estimated by the VPRT in its autumn forecast for 2015.

VPRT Market Forecast - 2016 Fall - Germany Paid Content Revenue 2012-2016e

Hans Demmel, Managing Director of n-tv and Chairman of the Board at VPRT, said: “Audiovisual media meanwhile rank among the most important growth and innovation drivers in the German economy and we still see exceptionally good market prospects in the AV sector in the years to come. The degree to which the added value potential can however be realised in Europe depends to a great extent on the creation of a fair regulatory framework for domestic market players in a competitive international market environment.”

The VPRT sees a particularly urgent need for political action in terms of creating a convergent regulatory framework, equal competitive conditions vis-à-vis the “global giants”, for instance in the case of advertising, ensuring access to and the findability of offerings on platforms, as well as innovation-friendly data protection regulations and effective content protection.

Frank Giersberg, Member of the Board of Directors responsible for Market and Business Development at VPRT, said: “Revenue generated by the audiovisual media topped the 10 million euro mark for the first time last year. For the current year, we are expecting more than 11 billion euros with sustained growth across all segments, the largest increase in absolute terms being in the sector of linear offerings and the highest percentage growth among on-demand offerings.”

In the case of television advertising, the Association envisages net growth of approx. 2.4 percent to 4.5 billion euros. This means that television will still remain the sector generating by far the highest revenue on the German advertising market. In the field of online video advertising integrated into streaming facilities (in-stream video advertising), VPRT is forecasting an increase of 24 percent to around 400 million euros. Based on the VPRT forecast, total revenue from video advertising (linear and non-linear) will climb to around 4.9 billion euros.

In the case of radio advertising, VPRT anticipates net revenue growth of 1.9 percent to around 760 million euros for the full year 2016 (commercial and public service broadcasters). In the in-stream audio advertising segment, VPRT is expecting growth of 40 percent to around 21 million euros (including online-only providers). A rise of 2.6 percent to around 780 million euros is envisaged for radio and audio advertising revenue (linear and non-linear).

Paid content revenue in the audiovisual media sector is expected to increase by 13 percent to some 3.5 billion euros by the end of 2016. Pay-TV will be the segment generating the highest revenue, realising growth of 6 percent to reach 2.3 billion euros. Paid video is estimated to grow by 25 percent to around 525 million euros and paid audio by 32 percent to some 640 million euros.

Growth also continues in the teleshopping segment where VPRT is expecting a 3 percent increase in revenue to reach approx. 1.9 billion euros.

Audiovisual media revenues* in Germany
Forecast net revenue in €bn, changes in% and in €m

 	                                           Change
                                           --------------
                                    2016e    in %    in €     2015
                                  -------  ------  ------  -------
  Radio advertising**             €0.76bn   +1.9%   +€14m  €0.74bn
  In-stream audio advertising***  €0.02bn    +40%    +€6m  €0.02bn
 Radio & audio advertising        €0.78bn   +2.6%   +€20m  €0.76bn
  Television advertising**         €4.5bn   +2.4%  +€106m   €4.4bn
  In-stream video advertising***   €0.4bn    +24%   +€77m   €0.3bn
 Video advertising                 €4.9bn   +3.9%  +€183m   €4.7bn
Audiovisual advertising****        €5.7bn   +3.7%  +€203m   €5.5bn

  Pay-TV                           €2.3bn     +6%  +€132m   €2.2bn
  Paid video                       €0.5bn    +25%  +€105m   €0.4bn
 Pay-TV & paid video               €2.9bn     +9%  +€237m   €2.6bn
 Paid audio                        €0.6bn    +32%  +€156m   €0.5bn
Paid content (A/V) - total         €3.5bn  +13.6%  +€393m   €3.1bn

Teleshopping                       €1.9bn   +3.0%   +€55m   €1.8bn
                                  -------  ------  ------  -------
Audiovisual media*****            €11.1bn   +6.2%  +€650m  €10.4bn

* Net revenue generated by all providers across the entire German market;
** Including commercial and public service providers;
*** Including international players;
**** Not yet included under “Audiovisual Advertising”: in-game, cinema and audiovisual outdoor advertising;
***** Not yet included under “Audiovisual Media” is other revenue generated by audiovisual media enterprises (e.g. from rights trading or licences) or fee income on the part of public service broadcasters. Nor has account been taken of revenue generated at upstream or downstream stages of the value chain (producers, networks, platforms, devices, agencies, service providers etc).

Source: VPRT Autumn Forecast 2016 (Revised: October 2016)

Experts consulted for the forecast continue to predict positive ongoing market prospects for the years 2017 to 2021, with rising investment activity in spite of increasingly intense competition. Forecasts focus particularly on the continued expansion of non-linear offerings, increasing investment in various types of interactive offerings (e.g. Smart TV, Smart Radio), the introduction of new types of offerings (e.g. virtual reality, 360-degree videos) and the ongoing advancement of digitisation and automation on an increasing number of levels (e.g. addressable TV, intelligent user interfaces, recommendation engines, metadata and programmatic advertising models).

Links: VPRT