CANNES: The rising popularity of the Internet as a source of news, along with cuts in advertising, threaten Europe's burgeoning TV news channels, industry sources said at the annual MIPCOM trade fair this week.
Thanks to the digitisation of cable and satellite networks, the number of TV news channels has doubled in Europe in five years, with 162 national and international news channels available today to viewers around Europe.
Total revenues made by these news channels is in the region of between one and 1.5 billion euros, while European broadcasters make total revenue of around 80 billion euros.
The surge in news channels since 2005 is mostly due to the growth of multi-channel platforms (satellite, cable, ADSL and television for mobile telephones etc.), said Andre Lange, head of markets and financing at the European Audiovisual Observatory.
This means that TV viewers in every European country with multi-channel services can chose from an average of 21 news channels.
France leads the league with a total 51 channels, of which 15 are in French. Germany holds second place with 33, and Britain is in third position with 31, just ahead of Italy and the Netherlands, which both have 30 news channels each, according to recent statistics from the European Audiovisual Observatory.
Asian news channels can also be viewed in Britain and France, and German audiences can also tune into Turkish news channels, the survey showed.
But the multiplication of news channels has resulted in a fiercely competitive market where production costs are high and audience share very low, running at between just two to three percent of the total national audience.
News channels integrated into large public service broadcasters such as BBC news, Italy's Rainews 24 or Spain's Canal 24 Horas, and big private media groups such as Sky News of Noticias 24, have a more solid financial base but are not always profitable.
Half of the others were in deficit in 2007 and 2008, the study said.
"We can expect some channels to go bust in the next few years," Lange said.
"The big groups, however, have a certain obligation to their viewers to provide news channels. And for some it will almost certainly be politically important," he added.
The crisis in the advertising sector and increasing popularity of the Internet as a news source, however, are throwing up doubts about the future.
"In certain countries such as Germany and Denmark, advertising on the Internet is starting to overtake TV advertising even if television audiences remain much higher than Internet audiences," Lange noted.
And this will force news channels into the Internet space where they will compete head-on with newspapers that also use audiovisual tools.
The good news on the horizon are the opportunities available on the cellphone market to news channels, as their short bulletins are perfect for the medium.
"News is the fourth-most popular programme on the Internet with young adults," Lange said.
But news channels still have a big hurdle in the mobile phone space how to turn a profit.