knowledge centre

Will policy and regulation of TV services in the EU start converging in the short-to-medium term?

Regulators and policy makers require structured and evidence-based arguments to move the debate forward and facilitate decision-making.

Connected TV

The European Commission (EC) and the UK will soon launch independent consultations on the policy and regulation of connected TV services. Both expect to present their conclusions by the end of 2013, after extensive discussions with stakeholders.

Connected TV is still a relatively small part of the TV 'ecosystem', but one that is growing rapidly. Changing the framework could be considered premature, but given that EC regulation can take 5–7 years to develop, starting the debate now is perhaps appropriate. Other countries are expected to follow suit.

This article sets the issue in context and will be followed up by a series of articles highlighting our views on the key elements of the debate and its potential evolution.


TV service consumption and revenue has grown steadily during the past five years, both in traditional linear TV (with moderate, single-digit growth) as well as in non-linear TV (such as 'catch-up' TV, video on demand, subscription video on demand and professional video online), which has grown exponentially. The three major European Union (EU) economies all experienced increases in online TV revenue between 2009 and 2010: France and the UK had 100% growth, while Germany had 35%.

Established broadcasters and TV platforms, as well as new TV/video aggregators and over-the-top (OTT) players, are all providing innovative products and services to consumers in a bid to offer preferred films, sports and TV programmes on any device, anytime, anywhere. Major operators (terrestrial, cable, satellite, fixed and, increasingly, mobile) have lent their support and investment to this focus on innovation.

New players are gaining significant market share of non-linear TV services and technologies (some analysts estimate that new OTT offerings accounted for 50% of non-traditional TV services in the US in 2011). This could have a substantial impact in the long term, depending on the reaction from established linear TV broadcasters. However, despite the dynamic development in these non-linear services, their rapid adoption and consumption, and the resulting pressure on associated costs and investments in networks and devices, the actual proportion of viewing remained relatively small in comparison with that of linear TV. Online revenue accounted for only 1.3% of TV revenue in the UK, 0.9% in France and 0.6% in Germany in 2010, according to data from the European Audiovisual Observatory. This shows moderate progress in comparison with the less than 1% figures for all three markets in 2009. Online TV revenue amounted to a modest EUR330 million in the top five EU countries in 2010 (see Figure 1).

Figure 1: Online TV revenue in the top-five European markets, 2006–2010 [Source: European Audiovisual Observatory, Analysys Mason, 2013]

Figure 1: Online TV revenue in the top-five European markets, 2006–2010 [Source: European Audiovisual Observatory, Analysys Mason, 2013]

Regulatory framework

Regulators and policy makers are monitoring developments to ensure that consumers' fundamental rights are protected; the specificities of broadcast media will need to be reassessed to reflect the new environment and to safeguard growth, innovation and competition. In the EU, formal consultations will be launched to make sure the potential need to adapt and/or consolidate discrete policy and regulatory frameworks is properly assessed. The EC is producing a green paper on connected TV this quarter, the UK will publish a white paper, and France has set up a commission to study the connected TV market. In February 2013, Germany's regulatory bodies published a paper outlining their priorities for connected TV regulation. Other countries, such as the Netherlands, are also opening up the debate.

At EU level, the policy and regulation of TV services is mainly based on directives and national regulation – for example, 'TV Without Frontiers', which is now called the 'Audiovisual Media Services Directive' (AVMSD). The regulation covers key elements such as diversity and plurality, minor protection, editorial responsibility, advertising limitations, rights, public service broadcasting and state aid, European works and spectrum – there is a lot at stake.

Key elements

Based on the above-mentioned consultations, and through our own analysis and experience, we have identified the following as key elements and issues likely to be at the core of debates on and reviews of TV policy and regulatory frameworks and competition cases across all EU countries in the coming years (see Figure 2).

Figure 2: Key issues in the debate surrounding the convergence of linear and non-linear TV services policy and regulation [Source: Analysys Mason, 2013]

Key elementKey issueKey policy and regulatory reference
TV advertising, teleshopping, product placement Asymmetries in TV advertising regulations Audiovisual Media Services Directive (AVMSD)
Access and prominence Must carry linear and non-linear TV services’ access to platforms and due prominence in EPG, searches, apps and so on Universal Service Directive, Access Directive
IP rights and premium rights Evolution of retransmission rights, territoriality, broadcast and video on demand windows, events of major importance and premium rights and distribution exclusivities Cable and Satellite Directive, AVMSD
Spectrum Spectrum and, eventually, administrative incentive pricing Framework Directive, National frequency plans and policies, EC spectrum inventory works and associated decisions
Reference markets Potential changes to the definition TV reference markets (for example, platform and/or business model) Market reviews, ex-post regulation
Net neutrality Non-discrimination of third-party content Framework Directive
European works Level of support to EU audiovisual production and model AVMSD
Protection of minors Protection of minors AVMSD

Each leading country in the EU assigns a different level of importance to each of these issues and the potential need and timing for convergence. For example, whereas UK stakeholders appear to prioritise access and prominence, Germany places an emphasis on advertising asymmetries and rights, while the protection of European works ranks as most important in France. In any case, 'jurisdictional' prevalence will be an underlying factor and it will be interesting to see how the wider EU debate develops around these different viewpoints.

Regulators and policy makers require structured and evidence-based arguments to move the debate forward and facilitate decision-making, and Analysys Mason is proud to continue working with major stakeholders across the EU and beyond, shaping the TV services of the future. Contact us to discuss our experience and capabilities in these areas.