Trends in the Audiovisual Production Sector

A New Phase for the Production of Italian Original Titles

• The growth of demand and Tax Credit (the two elements that have contributed to the significant growth in volumes over the last few years) will not have the same sprawling effect on the sector. In the context of general market consolidation, greater project selectivity is expected, along with an emphasis on product quality and its potential for international circulation.

The Aid System Supports the Transition to the New Market Phase

Basic Requirements for the Public Aid Structure

Businesses operating in production need an aid structure strongly characterized by a few basic requirements:

• Rigor / Certainty / Predictability concerning volumes, timing, rules, procedures, etc.
• Speed and Coordination of the assignments/payouts according to actual production timing/distribution
• Simplicity of the criteria and access methods
• Efficiency quantitative and qualitative on the production and distribution systems
  
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  Greater production efficiency, cost control, reduction of financial burdens
  
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  Greater competitive strength even in foreign markets

Role of the PSM Operator, the Pillar of Domestic Production
The public service operator (PSM – Public Service Media) is by far the largest investor in the production of Italian original titles, with an annual commissioning commitment worth about a quarter of total domestic production (across all genres).

• In addition to featuring an extremely low radio-TV license fee (among the lowest in Europe), Italy also boasts another record: the State’s withholding on the gross revenue of the license fee (users’ payment for the purpose tax) is the highest in Europe.
• In strategically important content segments like Fiction, Animation, and Documentaries, the budget available to the PSM operator has not seen increases for about a decade despite new challenges arising from the rise of global platforms.

Trends and Strategic Alerts for the Audiovisual Production Sector

• The increasing integration between linear and non-linear offerings (both in long-form and short-form) has a progressive impact on the upstream segments of the audiovisual supply chain (concept development / production)
• Non-linear operators are increasingly encroaching on unscripted genres, opening a new challenge for traditional broadcasters.
• The new strength of short-form offerings (Instagram, TikTok, etc.) is growing, opening new creative and economic perspectives also for production operators.

Mergers, Acquisitions and Consolidations in the Audiovisual Production Sector / 1

• The 2015-2024 decade has been strongly characterized by numerous mergers, acquisitions, and consolidations, including cross-border mergers of production and audiovisual companies. This process has radically transformed the sector, enabling the formation of larger firms/groups, often under foreign ownership.
• This trend is currently stabilizing.

Number of M&A for Biennial Periods Involving Domestic Production Companies

2/2