Market Insight

Channel 4 joins European Broadcaster Exchange to take on global platforms

November 16, 2017

Kia Ling Teoh Kia Ling Teoh Senior Research Analyst, Advertising and Television Media
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Channel 4 has announced its investment in European Broadcaster Exchange (EBX), a pan-European trading platform for digital video advertising founded by free-to-air broadcasters TF1 Group (France), ProsiebenSat.1 (Germany) and Mediaset (Italy and Spain).

Headquartered in London, EBX will aggregate the video on-demand inventory of its participants and allow advertisers to run regional campaigns with programmatic purchasing. It is created with an objective to allow advertisers to tap into one single source for premium video inventory on a regional scale.

Subject to European competition authorities’ clearance, the four partners will each take a 25 percent stake in the business. 

Our analysis

The four broadcasters are already members of the European Media Alliance, a media network of 11 Europe’s leading television corporations launched by ProsiebenSat.1 in 2014. Other members in the alliance are MTG (Scandinavia), Dogan TV Holding (Turkey), TVN (Poland), Antenna Group (Southeastern Europe), CME (Central and Eastern Europe), and SIC (Portugal).

The foundation of separate alliances such as EBX and the strategic multichannel network partnership formed by TF1, ProsiebenSat.1 and Mediaset in January 2017 indicates the strengthening of European broadcasters’ response to the threat of global online platforms.  

Channel 4’s 2016 financials showed flat TV revenue growth, in which advertising and sponsorship revenues grew 1.4 percent from £925 million to £938 million. This is below the overall UK TV advertising market level which grew 2.6% in 2016. Its digital revenues grew 24 percent to £102 million and now accounted for 10 percent of the total revenues. The other broadcasters reported either flat or declining TV advertising revenues in H1 2017, according to IHS Markit Media & Technology Digest.

Meanwhile, Facebook and Google continue to show double-digit growth in advertising revenues. Facebook announced 57.4 percent of advertising growth in 2016 and we forecast it to continue growing at 35.8 percent in 2017. Google advertising revenue grew 17.8 percent in 2016 and we forecast the growth to continue at 16.2 percent in 2017.

Facebook and Google already offer pan-regional advertising, and more and more advertising budgets are cross-border. In order to compete with these global platforms, it is critical for TV broadcasters to expand advertising sales to a wider geography, by investing in digital advertising sales. EBX allows bundling of premium video through a one-stop shop across some of Europe’s biggest advertising markets; thus, enable further utilization of the broadcasters’ digital video inventories for a wider audience base.

There was a growing concern among advertisers about advertising placement on inappropriate content and EBX is differentiating themselves by the more reliable premium video inventories they offer. The pact continues to seek partners and if proven effective, it would be feasible that other members of the European Media Alliance make their ad inventory available via EBX in the future.

Following the EBX’s alliance announcement, Channel 4 announced 100 percent targeted advertising for catch-up video service All 4 starting 2018. It is partnering with other TV advertising technology players such as Sky AdSmart.


Research by Market
Media & Advertising
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