Europe Digital Media Industry Sector report Note: This document is for representation purposes only. The facts and figures reported are masked. The report does not claim to accurately represent any industry, business entity, or person X/XX/XXXX www.insightbee.com | © XXXX InsightBee. All Rights Reserved Contents S. No. Section Page X Sector overview ................................................................................................................................................. X X Market size and growth ..................................................................................................................................... X X Key segments .................................................................................................................................................... X-XX X.X Online advertising ………………………………………………………………………………………………… X-X X.X Digital TV ………………………………………………………………………………………………………….. X-XX XX- X Key trends …………………………………………………………………………………………………………………. XX X.X European media consumption landscape ……………………………………………………………………… XX X.X Device penetration in the UK XX X.X Digital burst XX XX- X.X Entertainment and Media industry M&A landscape XX X Key drivers ………………………………………………………………………………………………………………… XX X Competitive landscape ...................................................................................................................................... XX X.X Commercial television groups in Europe ………………………………………………………………………. XX X.X Digital agencies in the UK ……………………………………………………………………………………….. XX X.X Media agencies in the UK ……………………………………………………………………………………….. XX X Appendix ............................................................................................................................................................ XX X InsightBee disclaimer …………………………………………………………………………………………………… XX www.insightbee.com | © XXXX InsightBee. All Rights Reserved p. 2 Sector overview • European digital market has gained momentum over the last couple of years despite slowdown from recession. It is expected to gain further pace with the adoption of digital technologies. Digital technologies not only alter the cost base of the companies but also enables creation of new kinds of products, services and business models. As per a analysis by Accenture, X% digitalization can contribute to X.X% increase in GDP. However, the growth in digital media is hampered by the lack of faith of leading EU companies in digital technology. Only XX%* of the EU executives feel that digital technology will transform the industry in the near term. • Currently the market can be broadly divided into two key segments: • Online advertising market: Online advertisement spending has grown from €XX.X bn in XXXX to €XXX.X bn in XXXX. In Europe, UK is the biggest advertisement market. • Digital TV market: Digital TV market has grown from €XX.X bn in XXXX to €XX.X bn in XXXX. Satellite TV and Digital Cable are the major segments contributing to this growth. • Major trends in the digital industry are: • Online media grew by XX% in XXXX since XXXX. It showed highest growth as compared to any other media segment : TV, Radio, newspapers and magazines. Programmatic ad buying is expected to be a major driver of online advertisement spending in the coming years. • The tendency of the european population for multi-tasking has increased. • Smartphones and Tablet penetration has grown to more than XX%. • M&A activity: • Cable & Satllite TV deals formed XX% of the top XX media deals by size in XXXX. This shows increasing transformation of the industry towards digital technology. • M&A activity is expected to increase further with US television majors’ interest in the European market. Source:* Accelerating Europe´s Comeback, Accenture, XXXX www.insightbee.com | © XXXX InsightBee. All Rights Reserved p. 3 Market size and growth UK Digital Media market UK Entertainment and Media industry (€ bn) Breakdown by digital and non-digital 84.0 €XXX.X operations – XXXX Note: Currency rate for XXXX: XGBP = X.XXXXEUR 82.0 Total: 80.0 €XXX.X 78.0 76.0 74.0 €XX.X Non-digital Digital XX% XX% 72.0 70.0 68.0 66.0 2014 2019 • The UK Entertainment and Media market is expected to grow at a CAGR of X.X% for the XXXX-XXXX period, reaching €XXX.Xbn in XXXX. Revenue from the Entertainment and Media industry’s digital operations is forecast to constitute half of the total industry revenue in XXXX, amounting to €XX.Xbn. Revenue growth will be fueled by increased Internet speeds and online advertising. • The fastest growing digital sectors will stem from the digitalisation of traditional media areas in TV advertising, out-of-home and book publishing. • In Europe, the UK will remain the largest online advertising market. In XXXX, the UK’s online advertising market stood at €X.Xbn and, for the XXXX-XXXX period, is expected to grow at a CAGR of XX.X%, reaching €XX.Xbn in XXXX. Source: ‘EU Online Advertising reaches landmark €XX.Xbn’ – IAB press release, May XXXX / ‘Global Entertainment & Media Outlook XXXX-XXXX’ – PwC, XXXX / ‘Media industry placed at the forefront of digital revolution’ – campaign.com (accessed on XX Jul) / Oanda.com www.insightbee.com | © XXXX InsightBee. All Rights Reserved p. 4 Key segments: Online advertising Online Advertising Segment Europe Online Advertising market (€ bn) 35.0 30.0% Online ad spend YoY Growth €XX.X 30.0 €XX.X 25.0% €XX.X 25.0 €XX.X 20.0% XX.X% 20.0 €XX.X XX.X% XX.X% 15.0% 15.0 XX.X% 10.0% 10.0 5.0% 5.0 0.0 0.0% 2010 2011 2012 2013 2014 • Europe’s online advertising market grew X.X% y-o-y in XXXX to reach €XX.Xbn. This marks five consecutive years of double-digit growth for this segment. • All three broad categories of this segment –Display, Search and Classifieds and Directories– recorded positive y-o-y growth. The key growth drivers in these online advertising formats have been the shifting use of devices and changing consumption patterns. • Display advertising outperformed other categories with a growth rate of X.X% y-o-y in XXXX. In XXXX, the total value of the Display advertising market was €X.Xbn (XX% of the total market). • Search grew X.X% y-o-y, with a market value of €X.Xbn (X% of the total). It continues to be the largest online advertising format in terms of spend, but its growth rate has slowed in the past three years. • The Classifieds and Directories market grew X..X% to €X.Xbn (X% of the total). This category benefitted from the improvement in the economy, but is increasingly challenged by Paid-for-search and Data-driven Display to compete for advertising budgets. Source: ‘EU Online Advertising reaches landmark €XX.Xbn’ – IAB press release, May XXXX / ‘Insights on Digital Growth and Opportunities from Europe’ – IAB report, Sep XXXX / ‘Europe’s online advertising market grows to XX billion euros, now accounts for XX% of total spend: IAB’ – thenextweb.com (accessed on XX Jul XXXX) / ‘IAB Europe: Digital Ad Revenues Record Double Digit Growth’ – exchangewire.com (accessed on XX Jul XXXX) www.insightbee.com | © XXXX InsightBee. All Rights Reserved p. 5 Key segments: Online advertising Online Advertising Segment Share of Online Advertising Formats Breakdown of Display Advertising XXXX Format – XXXX X% Total: XX% Total: €XX.Xbn XX% €XX.Xbn XX% XX% XX% XX% Display Search Classifieds and Directories Other Mobile Online video Other • Mobile and Online video advertising spend continue to show strong growth in XXXX and now command a significant portion of both the Display and Search advertising categories. Over XX% of growth in XXXX came from Mobile. • In the Display category, Mobile accounted for X% of the market in XXXX and recorded a y-o-y growth of XX.X%. Online video accounted for XX% of the Display market in XXXX. • The growth of Mobile and Online video reflects ongoing investments and innovation by the online advertising industry to meet advertiser needs. The shift in consumption trends will continue to drive further investments. Source: ‘EU Online Advertising reaches landmark €XX.Xbn’ – IAB press release, May XXXX (accessed on XX Jul XXXX) www.insightbee.com | © XXXX InsightBee. All Rights Reserved p. 6 Key segments: Online advertising Online Advertising Segment Europe Online Advertising market (€ bn) Share by country Top XX countries XXXX 10.0 X% €X.X 9.0 Total: X% XX% 8.0 €XX.Xbn X% XX% 7.0 X% 6.0 €X.X X% 5.0 €X.X XX% €X.X 4.0 XX% 3.0 XX% €X.X €X.X XX% 2.0 €X.X €X.X €X.X €X.X €X.X 1.0 UK Germany France Italy 0.0 Russia Netherlands Sweden Spain UK Germany France Italy Russia Netherlands Sweden Spain Denmark Norway Rest Denmark Norway Rest • UK continues to lead the European Online Advertising market, with nearly X/X of the market share in XXXX. Germany stood second with an XX% share, while France came in third with a XX% share. • The Central and Eastern Europe region recorded strong growth, as Online Advertising is still benefitting from the improvement in broadband infrastructure and the increase in broadband penetration in this region, which brings more addressable audiences online. • However, growth in European Online Advertising continues to be driven by the most mature online advertising markets in Europe. This is a direct result of investments in various formats and targeting capabilities and developing data strategies in a cross-device environment. Source: ‘EU Online Advertising reaches landmark €XX.Xbn’ – IAB press release, May XXXX (accessed on XX Jul XXXX) www.insightbee.com | © XXXX InsightBee. All Rights Reserved p. 7 Key segments: Digital TV Digital TV segment • Digital TV can be received: