Cross-media world hits European broadcasters

New advertising formats and direct business partnerships between content providers and advertisers pose a "tremendous threat" to the core business of European commercial broadcasters, industry experts have warned.

Yankee Group said that European free-to-air broadcasters are facing a "severe decline" in advertising revenue as a result of this shift.

The analyst firm believes that broadcasters must refocus their traditional business model to retain these budgets and margins, and explore new and emerging TV distribution and merchandising options.

The Yankee Group report noted that free-to-air broadcasters also face significant cost pressure from the analogue switch-off and the transformation to digital.

On average, only 30 per cent of most European broadcasters' revenue comes from channels other than advertising, the study estimates.

As a result, European broadcasters should begin exploring alternative broadcasting methods to generate greater revenue in today's on-demand world.

"European broadcasters cannot escape from branded entertainment and advertisers' demands for cross-media platforms," said Anette Schaefer, Yankee Group director for broadband and media Europe.

"Free-to-air broadcasters should prepare content for the digital switch to internet, IPTV and mobile as well as create new, scalable cross-media platforms while advertisers and brands engage with TV broadcasters to explore new ways to research and interact with consumers."

The study found that, even with lower production costs, the demand for HDTV is on the rise.

To compete in a pan-European or global market, production houses should engage with global brands that have restrictions in their core markets to develop global entertainment programmes.