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Is Europe’s production boom reaching a tipping point?

In its latest report, Enders Analysis predicts the streaming services are likely to shift their priority away from growth to profitability, which could lead to a drop in expenditure on content

Growth in Europe’s content supply may have reached its peak as the streaming services shift their focus from market grabs to profitability, according to a new report from Enders Analysis.

The report states that the perceived value of long-form video content is dropping as consumers pay smaller amounts for a greater volume of choice, from which they are watching less.

So far, the streamers have invested heavily in European video production, state the analysts, but this boom in SVoD production was fed by loss-making platforms, not an increase in consumer demand.

They describe the rise in European production as “unsustainable” and believe it will likely subside, undermining the momentum of the SVoD-driven growth model of producers. However, the research notes that the diversity of the European content industry, supported by regulation and relying on consolidating players, will ensure that the independent production model continues.

The report adds that the explosion of SVoD services has led to producers favouring the streamers as the best place to sell their content. But it warns that platforms are likely to reach a penetration ceiling that is much lower in Europe than it is in the United States.

The efforts of the streaming services to source local content from Europe is curtailed by their “balancing act of seeking local-for-global projects, and by the local broadcasters’ higher capacity to spot local-for-local ideas,” it adds.

“With stabilising penetration and consolidation, platforms are predicted to shift priority from growth to profitability and stop growing, or reverse their expenditure on content. Meanwhile, consolidated European broadcasters and producers with resilient resources find themselves in a better competitive position to snatch premium IP.”