// . //  Insights //  Unleashing The Power Of Video Streaming In Europe

In recent years, Europe has witnessed a significant surge in the popularity of video subscription services. As the demand for digital entertainment continues to grow, it is crucial to understand the key trends shaping the video subscription landscape in Europe. Based on our annual Global Consumer Survey of more than 7,000 respondents carried out in Spain, the United Kingdom, Germany, France, and Italy, it is evident that the youth demographic plays a pivotal role in driving the growth of video subscriptions, while the potential impact of reduced consumer income on churn rates poses a challenge for the industry.

Most European households have at least one streaming platform subscription

Europe stands out with its high penetration of video subscriptions, as 78% of households own at least one service, with 45% owning three or more. This indicates a strong appetite for video content among European consumers and highlights Europe’s position as a thriving market for video streaming platforms, with consumers actively engaging with multiple services to meet their entertainment needs.

Exhibit 1: Pay-TV and streaming services penetration in 2023
Percentage of video subscriptions per household
Source: NPA, Dataxis, Vaunet, OFCOM, AIMC and Oliver Wyman Telco Consumer Survey 2023
Exhibit 2: Number of video services per household in 2023
Percentage of respondents with at least one subscription, by # of subscriptions

The youth are driving streaming subscription rates

One of the key drivers behind the growth of video subscriptions in Europe is the youth demographic. Young adults exhibit a strong affinity for video content, with 63% of under-35s having three or more subscriptions versus 39% for the rest of the population. This demographic’s influence is a common trend across European countries. Young adults in the UK, Spain, and France, for example, also demonstrate a high engagement with video subscriptions, contributing to the overall growth of the industry in these countries.

Exhibit 3: Video services contracted directly or via telecom operator
Percentage of respondents with at least one subscription, by # of subscriptions and age

Fiber broadband operators fuel growth in Spain and the UK

Fiber broadband (FBB) operators have played a significant role in the Spanish and UK video subscription markets, with 32% and 28% of household video subscriptions respectively being provided by their fiber broadband operator. This percentage is much higher than in France, Italy, or Germany. The inclusion of video services in operators’ bundled offerings has contributed to the growth and adoption of video subscriptions among UK and Spanish consumers.

Exhibit 4: Households with pay services provided by their FBB operator in 2023
Percentage of respondents with FBB at home

The challenges of sustaining subscription expansion amid economic shifts

The potential impact of reduced consumer income on churn rates poses a challenge for the industry. The intention to increase video subscriptions in Europe has increased 20% compared to the previous year, with 28% of individuals expecting to do so. Additionally, European individuals intending to cancel some video services have increased fourfold. This trend may be influenced by the impact of rising inflation and the cost of housing and utilities, which are consuming a larger portion of consumers’ income, making it more challenging for them to afford discretionary expenses.

Exhibit 5: Are you likely to increase or decrease your number of video services in the next 12 months
While Europeans’ perspectives to increase # of subscriptions has increased 20% year over year, the intention to cancel some video services has grown 4x

Strategies for subscription success

To navigate these challenges and capitalize on opportunities, industry stakeholders must adopt a proactive approach. This includes monitoring churn, especially seasonal churn which is on the rise and especially prevalent with the youth. Adapting pricing strategies to accommodate changing economic conditions, for instance discounts with longer minimum terms. Increasing partnerships to create a bundle effect. Continually focusing on delivering content that resonates with the target audience.

By doing so, the European video subscription industry can position itself for continued growth and success in the evolving digital landscape.

In conclusion, video subscription trends in Europe reflect a dynamic and rapidly evolving market. The youth demographic, which influences the industry across Europe, serves as a driving force behind the growth of video subscriptions. While the potential impact of reduced consumer income poses challenges, consumers still crave the content. By understanding these trends and addressing the challenges head-on, industry players can seize opportunities and shape the future of the video subscription landscape in Europe.